Is Hurricane Sandy to blame for the monthly drop in new homes sales? Learn more about the factors behind the latest real estate market trends.
Sales of new single family homes dipped slightly in the month of October of 2012, but remain well above the pace for the same month last year, according to Commerce Department data released today that helps illuminate prevailing real estate market trends.
Sales fell 0.3 percent in October to a seasonally adjusted annual rate of 368,000, according to the Commerce Department, but the pace is 17.2 percent higher than the 314,000 rate for October 2011. Inventories stand at 147,000, a 4.8-month supply at the current sales rate.
What do the latest numbers say about real estate market trends? Home prices have been steadily trending up for the past six months, according to data released yesterday by S&P/Case-Shiller, but the market faces persistent headwinds. Stagnant income, chronic high unemployment, economic uncertainty and a significant shadow inventory of distressed homes “continue to affect the recovery,” according to Andrew Leventis, principal economist for the Federal Housing Finance Authority.
Home builders, which have reported steadily rising optimism over past months, are more likely to see the glass as half full. They perceive October’s sales as “essentially flat” compared to September, and attribute the slight dip to the effects of Hurricane Sandy, according to a blog published today by the National Association of Home Builders (NAHB), a Washington, DC, trade association.
The rate of sales continues to support the association’s forecast for a 22 percent increase in sales for 2012 compared to 2011. According to the NAHB, “New home sales will continue to rise at this modest pace as the pent up demand is released and as the policy uncertainties at the end of 2012 are resolved.”
More insight into the latest real estate market trends will be available tomorrow when the National Association of Realtors reports on pending home sales for the month of October.