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December 01, 2011

New Home Sales Edge Up In October
The US Commerce Department reported this week that sales of new homes in the US actually picked up in October, a rare positive sign for the housing sector that is still recovering from a slump now more than three years old. The report showed that sales of newly built homes rose 1.3 percent last month to a seasonally adjusted annual pace of 307,000 units, which is still less than half the pace of 700,000 economists see as the pace of a healthy housing market.

In 2010, a total of 323,000 new homes were sold, the lowest ever recorded since the government began tracking new home sales in 1963. And based on the numbers through the first ten months of this year, sales are likely to be even lower. While new home sales make up a small portion of the overall housing market, they are considered very important to the broader economy because they affect other areas. According to estimates from the National Association of Home Builders, each new home built creates an average of three new jobs for a year and generates around $90,000 in taxes.

The total number of new homes listed for sale in the US fell to 162,000 in October, the lowest number since such records have been kept. Many builders have ceased starting new projects due to difficulty securing financing, while others have stopped building because they have had to lower their prices so much that they can barely turn a profit.

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