New-Home Sales Rise; Builders See Stabilization

Sales of new homes rose 6.6 percent in September to a seasonally adjusted annual rate of 307,000, the U.S. Commerce Department said Wednesday.

Sales have been on the increase for two months, although year-over-year, new-home sales in September were down by 21.5 percent. “After dropping precipitously following the expiration of the first-time homebuyer tax credit, it looks as though new home sales have stabilized,” said Nicholas Tenev, an economist at Barclays Capital. “We expect a gradual recovery over the coming months.”

Meanwhile, the National Association of Home Builders on Wednesday cut its 2010 forecast for single-family home construction, but predicted that home building will begin to recover in 2011 and 2012.

Source: MarketWatch, Steve Goldstein and The Wall Street Journal, Jeffrey Sparshott (10/27/2010)

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