WASHINGTON — Americans bought slightly more new homes in October, a hopeful sign for the troubled housing market. But the median sales price fell to its lowest level of the year, and the overall sales pace is trailing last year’s — the worst in half a century.
The report suggests housing continues to drag on the U.S. economy and is a long way from recovering.
New-home sales increased 1.3 percent last month to a seasonally adjusted annual rate of 307,000, the Commerce Department said Monday. That’s less than half the 700,000 that economists say must be sold to sustain a healthy housing market.
September’s figures were also revised down significantly to show a weaker pace than first estimated.
Last year’s 323,000 new homes sold were the fewest since the government began keeping records in 1963. This year isn’t faring much better.
While new-home sales represent a fraction of the housing market, they 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.
Many builders have stopped working on new projects because they can’t obtain financing. The number of new homes for sale in the U.S. fell in October to a record low of 162,000. They are also struggling to compete against cheaper resales.
