New Home Sales: Strength in South Continued on Hurricane Rebuilding

Bottom Line: The South saw another month of strong gains in contract signings for homes not yet under construction, bringing the national new home sales to figure to a level not seen since 2007. Sales in September were revised modestly lower. On a trend basis the acceleration in the South has been enough to accelerate the national total after it had appeared to be stalling throughout the summer selling season. Still, the trend in the other, smaller regions, has stalled, leaving in question what the overall trend will look like once the hurricane-related bounce in the South subsides. New Home Sales ROSE by 6.2% to 685k, after the prior month was revised lower to 645k. This compared with market expectations for a decline to 627k, from the unrevised September level of 667k. Sales are now 18.7% ABOVE their year ago level, -- but they are still 50.7% BELOW their July 2005 peak. The Inventory of Homes Available for Sale ROSE by 1.4% to 282k. Inventories are now 13.7% ABOVE their year ago level but still 50.7% BELOW their July 2006 peak level. Combined with the increase in sales, the Months' Supply dropped to 4.9 months from 5.2 months. This is modestly BELOW a normal level of 6.0 months and well BELOW its peak of 12.2 in January 2009. Home Prices ROSE with median prices 3.3% ABOVE their year ago level and with average prices 13.6% ABOVE their year ago level.