New-Home Sales Hit Million-Plus Rate For Third Consecutive Month In October
November 27, 2002
Supported by historically low mortgage rates that continue to drive buyers to the housing market, sales of new single-family homes reached a seasonally adjusted annual rate of 1.01 million units in October, down 4.5 percent from an upwardly revised, all-time high rate of 1.05 million units in September, the Commerce Department reported today. This was the third consecutive month in which new-home sales have broken the million-unit pace.
"Taken all together, August, September and October were the three best months for new home sales ever," said Gary Garczynski, president of the National Association of Home Builders (NAHB) and a builder/developer from Woodbridge, Va. "Many buyers are seeing the best home financing deals of their lifetimes, and that is proving too good an incentive to pass up. While we can expect some moderation in this exceptional sales pace in months ahead, there is no question that the housing market is showing remarkable strength as the economy slowly recovers."
Regionally in October, new-home sales were up 1.2 percent in the South and 4.3 percent in the West, while the Midwest posted a 17 percent decline and the Northeast saw a 32 percent drop that only partially offset a huge gain in the previous month. The nationwide inventory of new homes for sale rose modestly, from a 3.8 months' supply in September to a still-healthy 4.1 months' supply in October.
Garczynski said that 2002 will almost certainly be the best year in history for new-home sales and that, even with some anticipated slowing of activity in months ahead, 2003 and 2004 are likely to be the second- and third-best years on record, respectively. NAHB is currently projecting that new-home sales for all of 2002 will reach nearly 960,000, up substantially from the current record of 908,000 units set in 2001.
Source: National Association of Home Builders