New home sales inch up in October

Sales of new homes rose in October, but remained at historically weak levels, according to a report released today by the U.S. Department of Commerce. Sales activity gained 1.3 percent over September and 8.9 percent compared to October 2010, standing at a seasonally-adjusted rate of 307,000 units. The median sales price of a new home in the month was $212,300.

“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,” said National Association of Home Builders Chairman Bob Nielsen. 

The sales gain was powered by the Midwest and West regions in the United States, which increased 22.2 percent and 14.9 percent, respectively. The Northeast remained unchanged, while the South experienced a 9.5 percent decline compared to the previous month.

Eighty percent of the new homes sold in October went for less than $300,000, according to the report. — Adam Fusfeld