New Home Sales Drop 3.6%
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U.S. Home Resales Up 9.4%; Prices Down
Foreclosures Up 5% from Summer to Fall
(AP) Sales of modern homes dropped unexpectedly last month as the effects of a pretty ~-to-expire tax credit for first-time owners started to decrease.
The Commerce Department said Wednesday that sales fell 3.6 percent to a seasonally adjusted recurring with the year rate of 402,000 from a downwardly revised 417,000 in August. Economists surveyed ~ the agency of Thomson Reuters had expected a pace of 440,000.
It was the pristine decline since March. Sales in September were down 7.8 percent from a year past.
The median sales price of $204,800 was off 9.1 percent from $225,200 a year earlier, goal up 2.5 percent from August’s level of $199,900.
The ear-ring in sales was driven by a nearly 11 percent decline in the West and a 10 percent small quantity in the South. Sales rose 35 percent in the Midwest and were unaltered in the Northeast.
The data reflect contracts to buy homes, not completed sales. Many commencing homes are sold while they are still under construction, and buyers may subsist worried that they won’t be able to complete the deal before the Nov. 30 deadline to take advantage of a tax credit of up to $8,000 on the side of first-time buyers.
Congress is considering extending the tax credit from one side March 31 and gradually phasing it out over the rest of next year.
“If they don’t extend it, then I think the pullback could be quite significant,” said Brad Hunter, chief economist with Metrostudy, a real estate research firm.
Even builders of more upscale homes have felt the shock of the looming deadline. That’s because those move-up buyers decision have trouble selling their homes without the incentive of the credit.
“The truth that the first-time homebuyer tax credit runs out is hurting,” uttered Bob Mitchell, chief executive of Rockville, Md.-based builder Mitchell & Best, who has gone from selling 80 to 100 homes yearly to around 30 this year. Still, he noted, “we’re at least selling something.”
There were 251,000 new homes for sale at the extremity of September, down 3.8 percent from August and the lowest schedule in nearly 17 years. At the current sales pace, that represents 7.5 months of take the place of.
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