New home sales slid 8.1% in October from the previous month but some are forecasting that builders will see a rebound in sales next near.
The U.S. Census Bureau reported Wednesday that sales of newly constructed single-family homes fell to a 283,000 seasonally adjusted annual rate in October from a 308,000 rate in September.
Sales in September were revised upward by 1,000 units. However, sales for August and July were slashed by 15,000 units.
The Census Bureau originally reported that sales from August to September rose 6.6%. Due to the revisions, sales actually jumped 12%.
Meanwhile, economists at Fannie Mae expect new home sales will total 330,000 in 2010 and builders will see a 20% uptick to 395,000 sales next year.
Weiss Research real estate analyst Mike Larson noted that inventories of unsold newly-built homes remain extremely lean.
"But builders "just can't compete" with "so much bargain-priced used home inventory" on the market, he said. And it will take some time to work through that supply of existing homes.
"New home builders won't have much to be thankful about anytime soon," Larson said.
Separately, the Federal Housing Finance Agency reported that house prices fell 0.7% in September from the previous month and 1.6% during the third quarter.
The GSE regulator's house price index is based on Fannie Mae and Freddie Mac purchase mortgage transactions.
"Over the past year, seasonally adjusted prices fell 3.2% from the third quarter of 2009 to the third quarter of 2010," FHFA said.
