WASHINGTON (AP) ¿ Sales of new homes rose more than 6 percent in October. But that was only because of strong results in the South.
Home prices rose in 11 major metro areas in September, but fell in nine. Home resales, meanwhile, were up nationwide, with the biggest gain in the Midwest.
Taken together, the data show that the housing market's recovery is still in its infancy and likely to be bumpy."We're muddling along the bottom of the housing cycle," said John Burns, a California-based real estate consultant. That mirrors the broader economy, which is emerging from the longest recession since the Great Depression. Reports Wednesday showed a decline in new jobless claims and an increase in consumer spending, while orders for costly manufactured goods fell unexpectedly. If the upward trend in housing continues, it would give the economic recovery more fuel. Spending on homebuilding and remodeling were an economic driver in the July-September quarter for the first time in nearly four years. During the housing bust, the building industry scaled back on construction to thin the glut of homes on the market. There were 239,000 new homes for sale at the end of October, the lowest inventory level in nearly four decades. At the current sales pace, that's a 6.7 months of supply, down from last winter's peak of more than a year, and a sign that builders may soon ramp up construction.