New-home sales increased 1.3 percent last month to a seasonally adjusted annual rate of 307,000, the department said. That was less than half the 700,000 that economists say indicate a healthy housing market.
September’s figures were revised down significantly to show a weaker rate than first estimated. The 323,000 new homes sold last year were the fewest since the government began keeping records in 1963. This year is not faring much better.
Sales were uneven across the country. They increased 22.2 percent in the Midwest and 14.9 percent in the West. But they were unchanged in the Northeast and fell 9.5 percent in the South.
While new-homes sales represent a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.
Many builders have stopped working on new projects because they cannot obtain financing. The number of new homes for sale in the United States fell in October to a record low of 162,000.
Builders are also struggling to compete against cheaper resales, even as they lower their own prices. The median sales price of a new home fell 0.4 percent in October from September, to $212,300.
Steven Wood, chief economist at Insight Economics, said the small number of new homes for sale should help the housing market recover quicker when prices began to rise.
But he said, “A sustained rebound in new-home sales appears unlikely.”
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