WASHINGTON (Inman News Features) - New home sales posted a seasonally adjusted annualized rate of 880,000 units in October, a 0.2 percent gain from the upwardly revised rate of 878,000 units sold in September, the Commerce Department reported. Regionally, new home sales in October rose 15.8 percent in the Northeast, 1.4 percent in the South and 3.3 percent in the West. Sales declined by 11.7 percent in the Midwest.
The supply of homes on the market remained constant at 4.3 months at the current pace of sales.
Bruce Smith, president of the National Association of Home Builders said housing remains a bright spot in an otherwise sluggish economy, but a number of factors could dampen housing demand this quarter. Those factors include mounting unemployment, lackluster consumer confidence and mortgage rates that have crept back up to 7 percent.
"We expect to see a modest housing slowdown going into the beginning of next year, but compared to past economic cycles, this is quite mild," Smith said.
Home sales this year should surpass last year?s mark of 877,000, even with the anticipated slowdown, he noted, and come in "around record levels" of 888,000.
Housing and housing-related industries and activities account for nearly 20 percent of the U.S. gross domestic product and are vital to the overall performance of the nation?s economy, according to the builders? group.