New home sales drop in October
* Sales tanked 8.1% to a seasonally adjusted annual rate of 283,000 from 308,000 in September. That was worse than the forecast for a reading of 312,000. Sales were down in most of the country, falling 12.1% in the Northeast, 20.4% in the Midwest and 23.9% in the West. They rose 3.1% in the South.
* The supply of homes for sale dipped slightly to 202,000 units from 203,000 a month earlier. That was the lowest going all the way back to June 1968. It was also good for 8.6 months of supply at the current sales pace, up from 7.9 a month prior.
* The median price of a new home slumped 13.9% to $194,900 from $226,300 a month earlier. That was also a 9.4% decline from a year ago, and it leaves prices at the lowest level since October 2003.
The new home market delivered another turkey of a performance last month. Sales fell sharply across most of the country, while home prices dropped to their lowest level in seven years. The one bright spot is inventories; the sharp cutback in home construction has left them extremely lean. In fact, they're running at the lowest in more than four decades.
But so much bargain-priced, "used" home inventory is available that the builders just can't compete. Over time, we'll work through that mountain of existing home supply. But the key words are "over time." New home builders won't have much to be thankful about any time soon.