New home sales rose by almost 7% in September to the highest level since June, a sign that the market might be stabilizing.
The U.S. Census Bureau reported sales of newly constructed single-family homes rose to a 307,000 seasonally adjusted annual rate in September from 288,000 in August. But the September rate is down 21.5% from a year ago.
Economists at the National Association of Home Builders are forecasting new home sales will total 332,000 by the yearend, down 11% from 2009.
Builders, however, expect 2011 will be much better with 455,000 in total unit sales — a 37% jump in one year.
"The new home market continued to recover a bit from the summer doldrums," said Mike Larson of Weiss Research. But the real estate analyst doesn't expect a vigorous rebound in demand any time soon.
"So many buyers have been burned so badly that housing demand is likely to remain depressed for years," Larson said. "Competition from cheap, distressed, used homes is also working against the home builders."
