New home sales jump 6.2% in October
The government had some good news Wednesday for the housing market: Sales of new homes were up 6.2% in October over the previous month.
That makes for a seasonally adjusted annual rate of 430,000 units, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. It represented a 5.1% increase above the October 2008 estimate.
Although these estimates tend to fluctuate, economists care about the pace of new-home sales because construction is an important slice of the U.S. economy.
“New-home sales are what I am focusing on because they are the ones that are going to drive” gross domestic product, said Cameron Findlay, chief economist at LendingTree.com.
“New-home sales are going to require the construction worker to go to the site, they are going to require new materials, they are going to require more labor -- all these things that are going to bode positively for the economy on a broad perspective,” he said.
The median sale price of new homes was $212,200 in October. The seasonally adjusted estimate of new houses for sale at the end of the month was 239,000. This represents a supply of 6.7 months at the current sales rate, the government said.
