The rate of new single-family home sales dropped 25.4 percent in October compared to the same month last year, while the median price increased 1.9 percent and the average price increased 5.5 percent, the U.S. Census Bureau and Department of Housing and Urban Development announced today.
Sales of new single-family homes in October were at a seasonally adjusted annual rate of about 1 million, the agencies reported, which is 3.2 percent below the September rate. The rate is a projection of a monthly sales total over a 12-month period, adjusted for seasonal fluctuations in sales activity.
The median sales price of new houses sold in October 2006 was $248,500 and the average sales price was $309,700.
The seasonally adjusted estimate of new houses for sale at the end of October was 558,000, which represents a supply of 7 months at the current sales rate. A supply of greater than six months is generally considered to indicate a buyer’s market. In October 2005 there was a supply of 4.5 months.
Regionally, the October new-home sales rate dropped about 52.6 percent in the Northeast, 36.5 percent in the West, 26.5 percent in the Midwest and 15.4 percent in the South compared to the October 2005 rate.
The agencies noted that statistics are estimated from sample surveys and are subject to sampling variability as well as nonsampling error including bias and variance from response, nonreporting, and undercoverage.
Changes in seasonally adjusted statistics can show irregular movement — it can take six months to establish a trend for new houses sold, according to the report. Preliminary new-home sales figures are subject to revision. The survey is primarily based on a sample of houses selected from building permits, and a “sale” is defined as a deposit taken or sales agreement signed. On average, the preliminary seasonally adjusted estimate of total sales is revised about 3 percent, the agencies reported.