New Home Sales Rise More Than Expected

Washington, DC, Oct. 27, 2008--New home sales homes rose in September and inventories shrank as builders slashed prices to their lowest level in four years.

The annual sales pace of 464,000 homes was up 2.7 percent from the revised August figure of 452,000, originally reported as 460,000 homes, Commerce Department data showed on Monday. Economists expected the new homes sales pace to dip to 450,000 from that original figure.

The median sales price of $218,400 was the lowest since the $211,600 level reached in September 2004, when the housing market was on the upswing. The housing inventory of 394,000 was the lowest since the 383,000 homes for sale in June 2004.

The 7.3 percent decline in inventory from August was the sharpest on record. At the current sales pace, it would take 10.4 months to clear the overstock of homes compared to the 11.4 months reported in August.

Also on Monday, data on building permits showed a more narrow decline than first reported for September.

The Commerce Department said that permit activity had declined by 6.1 percent -- compared to the 8.3 percent decline first reported.