Photo: Evan Lockridge
Sales of new homes on the United States skyrocketed in October, recording the biggest monthly increase in more than 30 years, according to a new U.S. Commerce Department report.
The 25.4% hike from the month before reflects an annual sales rate of 444,000 new homes, while new homes sales fell 6.6% in September. Compared with October a year ago, new homes sales increased 21.6%
The release of both the September and October report were delayed by the partial government shutdown in early October.
“The October sales numbers show that there is clearly a demand for new housing and the recovery remains on track,” said Rick Judson, chairman of the National Association of Home Builders and a home builder from Charlotte, N.C. “However, the recovery continues to be slowed by political uncertainty in Washington and ongoing constraints builders face with regard to tight credit conditions for consumers and the availability of labor, lots and materials.”
All four regions posted double-digit sales gains in October. Sales rose 19.2% in the Northeast, 34% in the Midwest, 28.2% in the South and 15.2% in the West.
“The strong October results return us to the sales levels we saw earlier this year and negate the pause caused by the sudden jump in interest rates,” says NAHB chief economist David Crowe. “We expect sales to continue to rise as pent up demand is released and first-time home buyers creep back into the market.”
However, some point out the jump in new home sales for October is not as good as it seems, according to CNBC.
Meantime, a separate private economic report gives a preview into last month’s employment situation, with official federal numbers due out Friday.
The ADP National Employment Report, which provides a snapshot of nonfarm private sector employment, shows 215,000 jobs were added in the U.S. in November, while the October number was upwardly revised from a 130,000 to 184,000 job gain. The November increase was the best so far this year.
Small businesses led the way in job creation, with 102,000 jobs added, while goods-producing employment rose by 40,000 jobs in November, up from 29,000 in October, with both construction and manufacturing payrolls adding 18,000 jobs each.
"The job market remained surprisingly resilient to the government shutdown and brinkmanship over the treasury debt limit,” says Mark Zandi, chief economist of Moody’s Analytics. “Employers across all industries and company sizes looked through the political battle in Washington. If anything, job growth appears to be picking up.”