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Sales of newly built, single-family homes rose 6.6% in September to a seasonally adjusted annual rate of 307,000 units, their best pace since June, according to data released by the U.S. Department of Commerce today.
"The fact that new-home sales are finally moving in the right direction -- albeit slowly -- is definitely good news following an exceptionally quiet summer at builders' sales offices and model homes," said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "The road to recovery will be a long one, however, and a key hurdle that must be surpassed is the lack of available credit for new-home construction so that builders can meet improving demand for new homes moving forward."
"Beyond the higher sales figure, another positive piece of data provided by today's report was the number of newly built, unsold homes on the market, which has been steadily declining since spring of 2007 and fell again to a modest 205,000 units in September," said NAHB chief economist David Crowe. "This suggests that builders continue to prudently winnow down their inventories. That said, the concern is that builders' ongoing difficulty in accessing production credit will keep the razor-thin supply of new homes from being replenished as consumer demand revives, thereby hindering the positive momentum."
Sales of newly built homes rose in three out of four regions in September, with the Northeast posting a 3.4% gain, the South a 3.2% gain, and the Midwest a remarkable 60.6% gain following a big decline in August. The West posted a 9.9% decline in new-home sales for September.
Due to the improved sales pace, the month's supply of new homes for sale declined from 8.6 in August to 8.0 in September.