Inventories rose 2000 to 147000 which remains at a very low level but shows some promise that builders are able to begin restocking. The month's supply was 4.8 well below an industry standard of 6 months.
Median home prices increased 5.7 percent and average prices rose 8 percent from October of last year. The rise is likely a dual effect of rising building costs and a continuation of a compositional effect. Recent homebuyers are those that can obtain a mortgage and the tight credit standards are making it less likely for moderate income households to qualify while higher income households are able to make it through the more restrictive thresholds.
Regionally sales were up in the Midwest and West both month-to-month as well as comparing the October level to the third quarter average which adjusts for typical unusual monthly movements. Sales were down in the South to 176000 but the August level was unusually high. The three-month moving average still stands at 184000 which is within a 3 percent range of the monthly levels from April to August 2012. The Northeast fell 32 percent but the monthly level of 21000 was well below the three-month moving average as far back as February 2012.
On an annual basis October sales were up 17.2 percent from one year earlier and continue to support an expected 22 percent increase in annual sales for 2012 over 2011. New home sales will continue to rise at this modest pace as the pent up demand is released and as the policy uncertainties at the end of 2012 are resolved.