New Home Sales Rise on Incentives

Washington, DC, November 29, 2007—Sales of new homes in the U.S. were up in October as builders slashed prices.

New home sales rose 1.7% to a 728,000 unit annual rate in October, less than the 753,000 rate economists had expected and still hovering near an 11-year low.

There was also a downward revision of September sales to 716,000 from the 770,000 first reported. That rate was the lowest since 714,000 in January 1996.

Compared to a year ago, U.S. sales of new homes were down 23.5%, dragged down by much slower sales in the West.

The median price of a new home was down 8.6% from September and down 13% from October 2006.

That price-cutting helped homebuilders reduce their inventories of unsold homes by 5.6% to an 8.5 months supply, down from 9.0 months in September.

New home sales in the Midwest last month rose 14.2%. They rose 6.8% in the South and 1.8% in the Northeast. In the West, however, sales fell 15.7%.