New home sales dipped in October, paced by a 32-percent drop in sales in the Northeast U.S. where Hurricane Sandy lashed the region late in the month. The Commerce Department reported Wednesday that sales of new single-family homes slipped by 0.3 percent to a seasonally adjusted pace of 368,000 for the month. September’s rate was downwardly revised to a 369,000 annual rate from a previously estimated 389,000.
The storm blasted the East Coast on October 29, cutting several days out of the month where buyers and agents would not be out looking at homes. The superstorm is not entirely to blame for the steep drop in buying in the area, however, according to the government because it hit so late in the month.
The October rate was beneath economists’ predictions of a relatively flat month at an annual rate of 390,000.
The sales decrease in the Northwest was added to by a 12 percent contraction in the South, but offset by a 9 percent growth in the West and a record 62 percent jump in sales in the Midwest.
Despite the drop in October, sales are still up 20.4 percent compared the end of October 2011, although still well below peak rates in 2005 of 1.4 million annual clip. Economists generally consider a 700,000 unit annual rate to be healthy.
Known to be volatile on a monthly basis, new home sales have been steadily trending upward as the housing industry continues to show signs of recovery. On the other side of the coin, factors such as strict lending practices and high unemployment have a choke hold on rapid recovery.
The less-than-expected economic data is not having much of an impact on Wall Street as traders are more focused on the upcoming fiscal cliff. The Dow Jones has edged modestly upward while the Nasdaq and S&P 500 are less than one-tenth of a point in the red halfway through the day.
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