Sales of new single-family U.S. homes rose 1.7 percent in October from a September level that was revised down sharply while the median sales price plunged, according to a government report Thursday that showed ongoing weakness in the ailing housing sector.
New single-family home sales rose to an annual rate of 728,000 from a downwardly revised rate of 716,000 in September, the Commerce Department said.
October’s rise was the first since April, but it came after a revised September sales pace figure that was the lowest since January 1996.
Analysts polled by Reuters were expecting October sales to fall to an annual rate of 750,000 from the September previously reported rate of 770,000.
Analysts noted that while the sales pace climbed in October, it started from downwardly revised figures in prior months.
“The overall picture is housing is still going to decline at least for the rest of this year,” said Adam York, economic analyst at Wachovia Economics in Charlotte, North Carolina. “We would not be willing to call September the bottom.”
Bond prices rose to session highs and the dollar trimmed gains after the report was released.
In October, the median sales price for a new home fell 8.6 percent to $217,800 from $238,400 in September - the sharpest month-over-month decline since September 1981. The price was down 13 percent from the year-earlier month, the largest year-over-year fall since September 1970.
There were 516,000 new homes for sale at the end of the month, a 2.3 percent drop from September. It would take 8.5 months to clear that inventory at the current sales pace, down from the 9 months’ supply reported in September.
The report comes a day after a realty trade association said sales of previously owned homes fell 1.2 percent to a record low 4.97 million-unit pace amid a nationwide credit crunch that has curbed available mortgage loans.