Homebuilders across the U.S. were encouraged with today's economic news of an increase in new home sales this past month.
According to newly released data from the U.S. Commerce Department, sales of newly built, single-family homes inched up 1.3 percent to a seasonally adjusted annual rate of 307,000 units in October. The gain is from a downwardly revised rate in the previous month, and marks the best pace of new-home sales activity since this May.
"Builders have been seeing some marginal improvement in sales activity over the past few months, particularly in select markets where consumer confidence is higher due to improved economic conditions," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB). "While this trend is encouraging, overall sales activity is still well below normal due to the effects of overly tight credit conditions for builders and buyers, the continued flow of distressed properties on the market, and inaccurate appraisal values on new homes."
"Today's report is right in line with our forecast for modest and gradual improvement in sales activity through the remainder of the year," said NAHB Chief Economist David Crowe. "Particularly encouraging is the fact that builders continue to hold down their inventories to match the current sales rate, with the number of new homes for sale now down to a sustainable, 6.3-month supply."
Regionally, new-home sales held unchanged in the Northeast and gained 22.2 percent in the Midwest and 14.9 percent in the West in October. The South was the only region to post a decline, of 9.5 percent.
Meanwhile, the nationwide inventory of new homes for sale held at an all-time record low of just 162,000 units in October, which is a 6.3-month supply at the current sales pace.