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Sales of new homes up in October, but prices fall

AP News
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Posted: Nov 28, 2011 10:04 AM
Sales of new homes up in October, but prices fall

Americans bought slightly more new homes in October, but the median sales price fell to its lowest level this year. The mixed report suggests the nation's housing market is a long way from recovering.

The Commerce Department says new-home sales increased 1.3 percent last month to a seasonally adjusted annual rate of 307,000. That's still less than half the 700,000 that economists say must be sold to sustain a healthy housing market.

Last year's 323,000 new homes sold was the worst year for sales since 1997. This year isn't faring much better.

New homes have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.