Hous­ing gains in Septem­ber fol­lowed slow August

Daily Local News (West Chester, PA) - - BUSINESS - By Joel L. Naroff joel@narof­fe­co­nomics.com

IN­DI­CA­TOR: » Septem­ber New Home Sales KEY DATA: SALES: » +3.1 per­cent; Over-Year: +29.8 per­cent; Prices: +1.9 per­cent IN A NUTSHELL: » “Hous­ing sales are ris­ing de­cently de­spite the lack of homes for sale.” WHAT IT MEANS: » Hous­ing is a crit­i­cal com­po­nent of the econ­omy and the new home sec­tor is the most im­por­tant part of this key seg­ment. It looks like con­di­tions are steadily im­prov­ing as new home sales rose mod­er­ately in Septem­ber. Of course, there was a huge down­ward re­vi­sion to the August num­bers, so the in­crease did come from a smaller base.

The gain was driven by a sharp re­bound in North­east sales and a solid rise in the Mid­west. Sales were up more mod­er­ately in the South but in the West they fell. For the first nine months of this year, de­mand has in­creased by 13 per­cent com­pared to the same pe­riod in 2015. I think that pretty much tells the story. As for prices, they were up mod­estly over the year, which is a puz­zle. The sup­ply of homes is near­ing the low­est lev­els we have seen in the last forty years, which should be caus­ing prices to rise faster. The per­cent­age change over the year has bounced around lately, so this

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