By ALAN ZIBEL (AP)
WASHINGTON — Sales of new homes rose last month to the highest level in more than a year as strong activity in the South offset weakness in the rest of the country.
The Commerce Department said Wednesday that sales rose 6.2 percent to a seasonally adjusted annual rate of 430,000 from an upwardly revised 405,000 in September. Economists surveyed by Thomson Reuters had expected a pace of 410,000.
There were 239,000 new homes for sale at the end of October, the lowest inventory level in nearly four decades. At the current sales pace, that’s a 6.7 months of supply, down from last winter’s peak of more than a year.
"If you’re looking for a sign that builders will need to start swinging their hammers again soon, this is it," wrote Mike Larson, real estate analyst at Weiss Research.
The report tallies signed contracts to buy homes, rather than completed sales. Home shoppers in October were acting before lawmakers decided to extend a tax credit for first-time buyers and expand it to some existing homeowners. The credit now covers contracts signed by April 30, and analysts expect it to further the housing recovery in the coming months.
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