New-home sales up as builders cut prices

by 26 Oct 2011
WASHINGTON (AP) -- Sales of new homes rose in September after four straight monthly declines, largely because builders cut their prices in the face of depressed demand. Analysts say the modest increase on the back of reduced prices suggests the struggling housing market is years away from a turnaround. The Commerce Department said Wednesday that sales increased 5.7 percent last month to a seasonally adjusted annual rate of 313,000 homes. Still, sales rose after hitting a six-month low in August. And the annual pace remains less than half the 700,000 that economists say must be sold to sustain a healthy housing market. A big reason for the gain was that the median sales price fell 3.1 percent to $204,400 -- the lowest since October 2010. The number of new homes on the market was also unchanged at 163,000, a record low. "Numbers show that while the housing market still has a pulse, it will not be back on its feet until there is significant job growth," said Mitchell Hochberg, principal of Madden Real Estate Ventures in New York. March through August is typically the peak buying season. But this year, Americans bought fewer new homes in that stretch than in any other six-month period on records going back to 1963. Read more from Yahoo Finance



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