Good News — For a Change

From the Financial Times:

Unexpected rise in new US home sales

By James Politi in Washington

Published: October 27 2008 16:25 | Last updated: October 27 2008 16:25

The pace of new home sales in the US rose by 2.7 per cent last month – a much better figure than forecast by economists – as low prices fostered a flurry of activity in the stricken US housing market amid an intensifying financial crisis.

New home sales rose to an annualised rate of 464,000 units after dropping by a steep 12.3 per cent in August, the US commerce department said on Monday. The inventory of unsold homes also dropped, from 11.4 months’ supply in August to 10.4 months’ supply last month. The median sale price for a new home fell to $218,400, its lowest level in four years.

The data roughly trace encouraging figures on sales of previously owned homes, released last Friday, indicating that a bottoming in home sales might be taking hold and that could pave the way for an eventual rebound in the US housing market – the root of the global financial turmoil.

But economists have cautioned that the stabilisation of home sales reflected buying conditions in July and August, and could be threatened by the deeper economic woes in late September and October.