New Home Sales Continue Robust Pace in October As Interest Rates Remain Low

Sales of new single-family homes rose to a seasonally adjusted annual rate of 1.226 million units in October, a 0.2 percent increase above the upwardly revised rate from the month before, the U.S. Commerce Department reported. The rate was 7.4 percent above the sales pace of October 2003.

“The momentum continues in the single-family housing market, thanks primarily to long-term interest rates that remain below 6 percent,” said Bobby Rayburn, president of the National Association of Home Builders (NAHB) and a home and apartment builder from Jackson, Miss. “New-home sales definitely are headed for a new record in 2004.”

“Attractive interest rates coupled with an improving job market and increased household income are unquestionably the key factors that continue to drive buyer demand,” said NAHB Chief Economist David Seiders. “The most recent NAHB/Wells Fargo Housing Market Index, based on our monthly surveys of single-family builders, reflects the builders’ continued confidence and optimism in the housing market.”

Two regions, the Northeast and the West, registered sales increases for the month. The Northeast posted a 19.7 percent increase, and sales in the West rose 12.7 percent. Sales in the Midwest were down 3.6 percent; sales in the South declined 9.1 percent for the month.

The inventory of unsold new homes was 412,000 units in October.