New Home Sales Fall to 18-Year Low

Sales of newly constructed homes slumped in October to an annual rate not seen since 1991, according to government figures released recently.

The U.S. Census Bureau reported that new home sales fell to an annualized rate of 433,000 in October. That’s down 5.3% from the revised 457,000 annual rate recorded in September, and off more than 40% from a year ago.

The median sales price of new houses sold in October was $218,000, down from $218,400 the month before. It was the lowest level since June 2004, when the median home price was $215,700.

Analysts say the declining number of homes on the market are a positive sign. Inventories have fallen for 19 months in a row and are down more than 25% from October 2007. As sales have plummeted, homebuilders have drastically scaled back production.