New-home sales rose 2% in September (from their August level) to a seasonally adjusted annual rate of 1.22 million units, a sign that the red-hot housing market still has some steam left.However, compared with sales in the same month last year, new-home sales were essentially flat. September's reading was the third-weakest of the year, according to figures released Thursday by the Census Bureau and the Department of Housing and Urban Development. In addition, home sales fell in the Northeast and the West, two of the hottest markets, but rose in the Midwest and the South. Sales in the South likely were aided somewhat by consumers looking for new housing in the hurricane-ravaged states of Alabama, Louisiana, and Mississippi.

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