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October Home Sales Spike by 8.9% From Last Year

New single-family home sales climbed to a seasonally adjusted annual 307,000 over October, 8.9 percent more than those figures estimated over the same time last year.

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The ""Commerce Department"":http://www.commerce.gov/ yielded the data Monday from new residential sales, which it collected and released via the ""Census Bureau"":http://www.census.gov/ and ""HUD"":http://portal.hud.gov/portal/page/portal/HUD.

Sales for single-family homes meanwhile crawled above revised September rates of 303,000 by 1.3 percent.

Data showed that median sales prices for new homes sold over October this year hovered at about $212,300, alongside an average sales price of $242,300.

The Commerce Department reported that new homes went up for sale on a seasonally adjusted basis at 162,000, or at

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around 6.3 months at current rates.

""The bigger picture is that house prices are still being weighed down by the huge number of discounted existing homes coming onto the market,"" ""Paul Diggle"":http://www.capitaleconomics.com/staff/property-economics/paul-diggle.html, a property economist with consultancy ""Capital Economics"":http://www.capitaleconomics.com/, wrote in a note.

The weak trickle in new home sales follows a string of reports offering still-low home prices, with ""Lender Processing Services"":http://www.lpsvcs.com/Pages/default.aspx reporting that figures for the latter ""fell"":https://themreport.com/articles/home-prices-tumbled-38-over-august-lps-2011-11-14 year-over-year by 3.8 percent over August.

""While the combined inventory of new and existing homes remains well above normal, a meaningful recovery in new home sales is just not on the cards,"" he added, suggesting that new home sales will plod alongside a ""weaker pace of economic growth"" expected over 2012.

A sluggish housing market keeps a heel on other growth indicators. The ""Mortgage Bankers Association"":http://mbaa.org/default.htm reported that mortgage application volume slid back by 1.2 percent last week from the week earlier, with purchase activity 5 percent figures from last year.

With respect to new home sales, Diggle said to expect more headwind from surging population growth.

""Admittedly, at some point activity in the new homes market will have to rebound to reflect underlying population growth,"" he wrote. ""But that is still a few years away yet.""

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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