Purchases increased 6.6 percent to a 307,000 annual rate that exceeded the median forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed yesterday. Demand is hovering near the record-low 282,000 reached in May.
A lack of jobs is preventing Americans from gaining the confidence they need to buy, overshadowing declines in borrowing costs and prices that are making houses more affordable.
At the same time, foreclosure moratoriums at some banks, including JPMorgan Chase, signal the industry will redouble efforts to tighten lending rules, which may depress housing even more.
“These are still very low levels,’’ said Jim O’Sullivan, global chief economist at MF Global in New York. “Ultimately, a significant recovery in housing will depend on a clear pickup in employment.’’
Economists forecast new home sales would increase to a 300,000 annual pace from a 288,000 rate in August, according to the median of 73 survey projections. Estimates ranged from 270,000 to 330,000.
The median price increased 3.3 percent from September 2009 to $223,800.
Purchases rose in three of four regions, led by a 61 percent jump in the Midwest. Purchases dropped 9.9 percent in the West.
The supply of homes at the current sales rate fell to 8 months’ worth, down from 8.6 months in August. There were 204,000 new houses on the market at the end of September, the fewest since July 1968.
Reports earlier this month showed the housing market is hovering at recession levels.
Housing starts increased in September to an annual rate of 610,000, the highest since April, while building permits fell to the lowest level in more than a year, signaling construction will probably cool.
Sales of existing homes, which now make up more than 90 percent of the market, increased by 10 percent to a 4.53 million rate in September, the National Association of Realtors reported on Tuesday.
The pace was still the third-lowest on record going back a decade.
Bloomberg News October 28, 2010
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