New home sales pop 6.6% in September
* Sales popped 6.6% to a seasonally adjusted annual rate of 307,000 from 288,000 in the prior month. That was better than the 300,000 sales that economists were looking for, but still only puts us back to roughly the level of sales we had in June. Sales rose in three out of four regions of the country -- by 3.2% in the South, 3.4% in the Northeast and 60.6% in the Midwest. Sales fell 9.9% in the West.
* The number of homes for sale continued to fall - to 204,000 from 206,000 in August. That's the lowest level of new home supply since July 1968. The months supply at current sales pace indicator of inventory dipped to 8 from 8.6 a month earlier.
* The median price of a new home ticked up 1.5% to $223,800 from $220,500 in August. That was also good for a 3.3% year-over-year rise.
The new home market continued to recover a bit from the summer doldrums, notching a gain of almost 7% in September. We saw broad-based regional strength, led by the Midwest, and the supply of homes for sale shrank yet again. In fact, we haven't had this few new homes on the market since 1968, the year the first ATM machine was installed in the U.S. and the Big Mac was introduced.
Still, we clearly aren't seeing a vigorous rebound in demand. Nor should we expect to any time soon. So many buyers have been burned so badly that housing demand is likely to remain depressed for years. Competition from cheap, distressed, used homes is also working against the home builders.