New home sales declined 0.3% in October, according to a government report released Wednesday. Despite the monthly drop, sales were still up 17% from a year earlier.
New houses sold at an annual rate of 368,000 in the month, down from 369,000 in September, according to a report from the U.S. Census Bureau and the Department of Housing and Urban Development. The September sales were revised downward from 389,000.
October sales fell far below expectations from economists, who had forecast they would rise to 388,000, according to Briefing.com.
That’s according to a CNNMoney article today which goes on to name hurricane Sandy as a major reason citing a 32% decline in the Northeast.
As that may be a reasonable assumption I firmly believe the decline can be attributed to the lack of supply in the new home market. As the real estate market collapsed, most new home builders halted all construction with some abandoning projects and selling their lots altogether. 2012 marks the return of home builders but have been unable to keep up with demand from buyers who face a slim supply of existing homes and fierce competition.
As prices continue to rise more and more home builders will take on new projects to satisfy demand or at the very least make up for the lack of construction we’ve experienced for the past 4 years.
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About Daniel Di Matteo
THE REAL ESTATE BUSINESS HAS LESS TO DO ABOUT SELLING PROPERTIES AND EVERYTHING TO DO ABOUT HELPING PEOPLE.
