The Commerce Department this morning (Nov. 29) reported that sales of new single-family homes in October rose 1.7% from September to a seasonally adjusted annual rate of 728,000, 23.5% below October of last year.

The median price of a new single-family home fell to $217,800 from $238,000 last month; the average sales price was $305,800, up from $288,000 in September. The seasonally adjusted estimate of new houses for sale at the end of October was 516,000.

The sales increase, while modestly positive, was primarily due to a downward revision in the September annual sales rate of 770,000. Moreover, the estimates, issued jointly by the Census Bureau and the Department of Housing and Urban Development, do not include the impact of incentives on pricing, nor do they allow for cancellations of new home contracts.

Inventory levels fell to 516,000 from 523,000; the month's supply fell from an upwardly revised 9.0 months in September to 8.5 in October at the current sales rate.

Regionally, sales were up 1.8% in the Northeast, up 14.2% in the Midwest, up 6.8% in the South and down 15.7% in the West.

Separately, the Officer of Federal Housing Enterprise Oversight, which tracks sales nationally that involve conventional conforming loans, reported that or the first time in nearly 13 years, U.S. home prices experienced a quarterly decline. The OFHEO House Price Index (HPI), based on data from sales and refinance transactions, was 0.4% lower in the third quarter than in the second quarter of 2007. This is similar to the quarterly decline of 0.3% shown in the purchase-only index. Compared to the same period last year, prices were up 1.8%, the lowest four-quarter increase since 1995.

The states with the greatest rates of appreciation between the third quarter of 2006 and the third quarter of 2007 were: Utah (12.9%), Wyoming (11.8%), Montana (7.7%), New Mexico (7.4%), and Washington (7.0%). The states with the largest depreciation for the same period were: Michigan (-3.7%), California (-3.6%), Nevada (-2.4%), Massachusetts (-2.3%), and Rhode Island (-2.2%).