[WASHINGTON] Sales of new US single-family homes rose for a third straight month in October, but a downward revision to the prior month's sales pace indicated the housing market recovery would remain gradual.
The Commerce Department said on Wednesday that sales gained 0.7 per cent to a seasonally adjusted annual rate of 458,000 units. September's sales pace was revised down to 455,000 units from 467,000 units.
Economists polled by Reuters had forecast new home sales rising to a 472,000-unit pace last month.
New home sales, which account for about 8 per cent of the housing market, tend to be volatile month to month. Compared to October last year, sales were up 1.8 per cent.
Housing remains constrained by slow wage growth, which is resulting in a slow pace of household formation.
Last month, new home sales rose 7.1 per cent in the Northeast and surged 15.8 per cent in the Midwest. In the populous South, sales fell 1.9 per cent and were down 2.7 per cent in the West.
With sales rising modestly, the stock of new houses available on the market rose 1.0 per cent last month to the highest level since June 2010.
At October's sales pace it would take 5.6 months to clear the supply of houses on the market, up from 5.5 months in September. Six months' supply is normally considered a healthy balance between supply and demand.
The median new home price jumped 15.4 per cent from a year ago to a record US$305,000.