US new home sales rise to 10-year high

WASHINGTON — The sales of new single-family US homes quickened for the second straight month in October, rising to the highest level since the housing bubble, according to data released on Monday.

The increase could point to a recovery in sales after what had been a sluggish year amid tightening supply and rising prices.

But the monthly gain was boosted by the storm-damaged southern US, which continued to see robust sales.

Sales of new homes rose 6.2 per cent compared to September to an annual rate of 685,000 units, seasonally adjusted, the fastest pace since October 2007, the Commerce Department said in its monthly report.

The result overshot the expectations of analysts, who had been expecting a 2.5 per cent decline.

The estimates are subject to a high degree of uncertainty, however. Sales in September, which originally were reported as a 10-year record, were revised down.

Analysts have said the tight housing market is weighing on sales and pricing houses beyond the reach of many would-be homeowners.

Yet, sales in the South, which suffered back-to-back hurricanes at the end of the summer, rose to 383,000 units — the highest level since October 2007 — even though it was an increase of just 1.3 per cent from the prior month.

Sales soared in the northeast, jumping 30.2 per cent, also a 10-year record, while sales in the Midwest surged 17.9 per cent.

The brisk sales pace drew down the supply of available new homes to 4.9 months, a 5.8 per cent decline, but in raw numbers the pool of houses for sale changed little at 282,000, the highest since May 2009.

Despite the strong demand, the median sales price fell 3.7 per cent to $312,800 but the average sales price hit its highest level on record, rising five per cent to $400,200.