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New-Home Sales Rise 6.6% in September

New-home sales rise 6.6% in September to an annual rate of 307,000 units.

(Updated with additional information and analyst commentary.)



) -- Sales of newly built homes rose 6.6% in September to a seasonally adjusted annual rate of 307,000 the Commerce Department said Friday morning.

The figure came in well ahead of expectations for a rate of 299,000 after a

rate of 288,000 in August


September's new-home sales rate represented a 21.5% decline from year-earlier results.

The sharp year-over-year decline indicates there is no major rebound, according to Douglas S. Roberts, chief investment strategist for Channel Capital Research.

Roberts said the big month-over-month percentage jump in new-home sales -- as well as the

10% jump in existing-home sales reported earlier this week -- is due in part to home sales that went under contract over the summer but weren't closed until September. A number of those sales were likely families with children who wanted to move over the summer rather than have their kids switch schools mid-school year, he said.

The median sales price for new houses sold in September was $223,800, the Commerce Department report said, while the average selling price was $257,500. There were 204,000 new houses on the market at the end of August. It would take 8 months to work through that inventory at the current sales pace.

Roberts added that home inventories are likely even larger than the government was able to report, pointing to a "shadow inventory" of homes owners would like to sell but have kept off (or taken off) the market because they don't think the houses will sell under current market conditions.

The government data followed a reported earlier this week on existing-home sales.

The National Association of Realtors said that sales of previously occupied homes rebounded 10% in September to a better-than-expected seasonally adjusted annual rate of 4.53 million units

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Despite the better-than-expected rebound, September's existing-home sales data remains the third worst rate on record and 19.1% below year-earlier levels when first-time

homebuyers were rushing to take advantage of federal tax credits .

Stabilization in home sales may not lead to a rebound in the overall housing market given the "overhang of existing homes from foreclosures," Roberts said. "A foreclosure moratorium doesn't solve the issue; it just drags out the problem."

Just as the subprime mortgage troubles expanded into a total housing market downfall, the latest scandal in the home loan industry has expanded into a nationwide political firing line aimed -- once again -- toward the banks due to

problems with foreclosure filings

, dubbed "robo-signing."

A separate report on Tuesday from the

S&P/Case-Shiller 20-city index of national home prices showed that home prices across the U.S. ticked up 1.7% in August year-over-year . That followed a 3.18% gain in the prior month, indicating that the rate of price increases is decelerating. The uptick disappointed market watchers who expected the index to rise a more robust 2.1%.

Fifteen of the 20 cities measured in the index showed a decrease in home prices month-over-month. Twelve of the 20 posted negative annual growth rates, two more than were reported in July. The S&P/Case-Shiller 20-city index is a moving three-month average, so data for August was swayed by data from June and July.

In yet another data point to consider when monitoring the still-struggling housing market, the Federal Housing Finance Agency said Tuesday that its measure of home prices rose 0.4% from July to August. Economists expected the index to dip 0.2% after a downwardly revised month-over-month decline of 0.7% reported for July.

Stocks in the homebuilder sector were lower after the report. The

SPDR S&P Homebuilders

(XHB) - Get SPDR S&P Homebuilders ETF Report

, an exchange-traded fund that tracks the homebuilder sector, fell 1.3%, while the

iShares Dow Jones US Home Construction

(ITB) - Get iShares U.S. Home Construction ETF Report

ETF also lost 1.3%.

Among individual homebuilder stocks,


(WY) - Get Weyerhaeuser Company Report


D.R. Horton

(DHI) - Get D.R. Horton, Inc. Report



(PHM) - Get PulteGroup, Inc. Report



(LEN) - Get Lennar Corporation Class A Report

all traded lower Wednesday morning.

The housing market has been under tremendous pressure for some time, and demand fell further after the

springtime expiration of federal tax credits for homebuyers

that offered credits up to $8,000 for first-time buyers and $6,500 for those buying new primary residences.

>>4 Top Homebuilder Stocks: Life After the Tax Credit

-- Written by Miriam Marcus Reimer in New York.

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