October’s New Home Sales Improve Over September Rate

Sales of new homes edged down 0.5% in October, the sixth monthly decline of the year but a major improvement over the previous month, the government reported today.

The Commerce Department said new, single-family homes were sold at a seasonally adjusted annual rate of 649,000 units in October, after a 10.2% plunge in September.

The September decrease was revised from a 14% fall originally reported last month.

Fixed-rate mortgage interest rates fell to 9.82% by the end of October after rising into the double digits in September. Analysts had said the lower rates would lead to an improvement in the housing industry.

The National Assn. of Realtors reported today that its index measuring the ability of the typical American family to buy an existing home rose in October to its highest level in eight months because of stable rates and a drop in the median home price. The real estate group said the index rose to 106.1, from 103.5. That means a family with a median income of $33,365 had 106.1% of the income needed to buy a median-priced existing home costing $92,100.