New-Home Sales Plunged 25% in October

In yet another ominous sign for the housing industry, new-home sales plunged 25% in October from the level of a year earlier to a seasonally adjusted annual rate of just over 1 million units.Meanwhile, there is now a seven-month supply of new homes for sale, a 55% increase from that of a year ago. It was the third-worst reading for new-home sales this year, according to sales figures compiled by the Census Bureau and the Department of Housing and Urban Development. Compared with those of the previous month, new-home sales fell 3%. On Tuesday, the National Association of Realtors released figures showing that existing-home sales in October fell 11.5% from the level recorded in October 2005. The NAR also reported that resale prices fell a record 3.5% year-over-year. Two weeks ago, the National Association of Home Builders reported that builder confidence was still low, but improving. "More and more builders are seeing the light at the end of the tunnel," said NAHB president David Pressly.