The Associated Press reported yesterday that, “Americans bought new homes in October at the fastest pace in a decade — a 6.2% monthly increase that reflects both the underlying strength of the economy and the worsening shortage of existing homes for sale.
“The Commerce Department said Monday that new-home sales last month rose to a seasonally adjusted annual rate of 685,000. That marks the third straight monthly gain and the best sales clip since October 2007. Much of the sales growth came from the Northeast and Midwest, with the South and West posting smaller increases.
“Many buyers are turning to new construction because there is a shrinking supply of existing homes for sale. But new construction has been unable to keep up with demand. Potential buyers are searching for homes amid a healthy job market with a 4.1% unemployment rate and attractive 30-year mortgage rates that are averaging less than 4%.”
The AP article noted that, “The average sales price of a new home jumped 13.6% over the past 12 months to $400,200.
“These price increases are a sign that builders are able to charge more money because of the dearth of inventory.”
