The Census Bureau reported that new homes sold at a 728,000 annual rate in October, up from a 716,000 annual rate reported for September. Bad things will happen to anyone who highlights this increase. The September sales data were revised down by 54,000 from a previously reported annual rate of 770,000. This means that the annual sales rate for October is 42,000, or 5.5 percent, lower than the previously reported September rate. If this number is not revised downward we can be happy about the change in direction from the September rate, but we are still looking at much lower sales than we had been before this release. The really big news in this release was a 8.6 percent drop in the median sales price, putting it 13 percent below the year ago level. The monthly data here are very erratic, but this is a very sharp drop and suggests some serious discounting to unload homes. [Okay, someone at USA Today is in big trouble. The headline is "Price of new home tumbles in October even as sales rise." Toward the end of the article we find out about the downward revision to the September data and that October sales were far below expectations, but this is too little, too late.
--Dean Baker
