U.S. home sales at fastest pace since May

Sales of new U.S. homes edged up modestly in October, led by a big jump in activity in the Midwest.

The Commerce Department says new home sales advanced 0.7% last month to a seasonally adjusted annual rate of 458,000. That followed a smaller 0.4% gain in September and put sales at the highest point since May.

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“New home sales tracked a 458,000 rate in October, slightly below the 471,000 expected but with the miss mainly due to a revision to the prior month,” writes Andrew Grantham of CIBC WM Economics in a note to analysts. “Sales were actually 0.8% up compared with the revised September figure.”

The strength last month came from a big 15.8% increase in sales in the Midwest and a smaller 7.1% rise in the Northeast. Those increases offset a 1.9% fall in sales in the South, which accounts for half of the new-home market, and a 2.7% drop in the West.

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Housing has struggled to recover since the recession ended in June 2009.

“Overall though, the trends in both pending and new home sales are broadly sideways at present, suggesting that the recovery in US housing since the bad start to the year is simply taking a bit of a breather rather than actually reversing,” Grantham adds.

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Staff, with files from The Associated Press

The Associated Press is an American not-for-profit news agency headquartered in New York City.