New home sales slipped further in October and the September rate was revised lower. At 1.004 mln, the seasonally adjusted annualized rate is the lowest since July (0.979 mln). The rate had improved in both August and September, by 2.1% and 3.7%, respectively. Both IFR and the median had called for a 1.050 mln rate in October.
There is now a 7.0-month supply of homes to clear, up from 6.7 months in September. The number of homes available, however, declined 4k to 558k, a 7-month low. The 3-month moving average on inventory fell to 6.9 months from 7.0 months in September, a 15-year high.
The median price jumped 13.9% in October to a 6-month high and the third highest on record. In September, the median price fell by 9.3%, the most in any one month since September 1981. The October jump is the highest on record but dubious. Prices have fluctuated, up one month and down the next, consistently since January. From this pattern, we expect price to fall by 4.8% in November to 236.6k. From a year ago, the median price of a new home is up 1.9%, whereas the median price for an existing one-family home is down 11.5%.
Sales of new homes in the Northeast fell by 39.0% for the month, building on a 27.2% drop in September. From a year ago, new home sales in the Northeast were off 52.6%. At just 36k, the October rate was the lowest since January 1982. Sales in the Midwest fell by 5.6%, also the fourth decline in five months and putting the year-ago drop at -26.5%. Sales in the South were off 1.7%, the first decline in three months. The year-ago pace is down 15.4%. Sales in the West rose by 3.2% for the month but remained down 36.5% from October 2005.
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