New-home prices drop 9.7% from 2005, biggest fall in 35 years

Thursday, October 26th, 2006

USA Today

WASHINGTON (AP) — The median price of a new home plunged in September the largest amount in more than 35 years, even as the pace of sales rose for a second month.

The Commerce Department said the median price for a new home sold in September was $217,100, down 9.7% from September 2005.

That was the lowest median price for a new home since September 2004 and the sharpest year-over-year decline since December 1970. The weakness in new-home prices was even sharper than a 2.5% fall in the price of existing homes last month, which had been the biggest drop on record.

The price decline for new homes came while the sales pace picked up, rising 5.3% to a seasonally adjusted annual rate of 1.075 million homes. It was the second consecutive increase in sales, after three months of declines.

Still, September sales were down 14.2% from September 2005.

The supply of homes available for sale at the current sales pace fell to 6.4 months’ worth from 6.8 months in August. There were 557,000 homes available for sale at the end of September, down 1.9% from 568,000 in August.

New-home sales rose 23.9% in the West in September and 6.9% in the South. They fell 34.5% in the Northeast and 6.3% in the Midwest.

The rise in sales last month was led by a 23.9% jump in the West. Sales were also up 6.9% in the South. Sales fell by 34.5% in the Northeast and were down 6.3% in the Midwest.

The Commerce Department’s report on new-home sales in September came a day after a real estate trade group said existing home sales slipped in September for a sixth straight month. The National Association of Realtors said home resales slowed to an annual rate of 6.18 million from a 6.30 million pace in August.

Comments are closed.