New Home Sales Tumble -- Again

New home sales sank precipitously in October, nearly tying for the worst month of 2010New home sales dropped precipitously in October, very nearly tying for the worst month of sales in 2010. Home sales fell 8.1 percent to 283,000 units in October, down from 308,000 the previous month, the Commerce Department reported on Wednesday.

The worst month in 2010 was August, when new home sales plummeted to 275,000 units in response to the end of the up-to-$8,000 homebuyer tax credit. The best month of sales in 2010 was April with 414,000 units, when the tax credit officially came to an end.

The poor sales of new homes were coupled by a considerable drop in the median home price, which fell nearly 13.9 percent to $194,900 from $226,300 the previous month.

The steepest decline in month-over-month sales occurred in the West and Midwest, where new home sales shrank 23.9 percent and 20.4 percent, respectively. Only the South posted moderate sales growth, up 3.1 from September.
Even as mortgage rates hover near record lows, tighter credit restrictions and a lack of home equity continue to prevent many interested homebuyers from making the move. But for those that can qualify for today's low mortgage rates, opportunities abound in nearly every housing market.
For more on buying a newly constructed home and related topics see these AOL Real Estate guides:


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