Dismal October new US home sales spur seasonal worries

Weak October U.S. home sales, discord among lawmakers over the federal budget and debt and the uncertainty of ongoing economic recovery have homebuilders uneasy about the upcoming winter and spring seasons.

New home sales dipped 8 percent in October from September, and 6 percent from the same month in 2012, according to John Burns Real Estate Consulting’s monthly survey, cited by the Wall Street Journal. The tumble marked the second consecutive month of falling year-over-year numbers, and the first such falters since early 2011.

The number of builders raising prices also continued to fall, with 28 percent of October respondents noting increased prices, compared to 32 percent in September and 64 percent in July.

“October was basically a crummy month for a lot of builders,” Jody Kahn, senior vice president of John Burns, told the Journal. “Their frustration is about the government shutdown and how it probably trumped any seasonal (sales) lift that builders were hoping to see.”

A fourth-quarter fall in the number of new home contracts signed is typical, according to the Journal, but the cocktail of ongoing national budget and debt quarrels and an economy still in recovery have analysts wondering whether this year’s slow season will be worse than usual.

“There’s some nervousness about the spring selling season,” Kahn told the Journal. “That’s partly because they’re worried … the lack of urgency from their prospects will continue.” [WSJ] — Julie Strickland