Rise in Sales of New Homes Surprises Economists


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Despite the downward revisions, new home sales rose in the third quarter compared with the April-June period.

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Brendan Mcdermid/Reuters

WASHINGTON — Sales of new single-family homes unexpectedly rose in September, pointing to sustained demand for housing even as data for the previous three months were revised with lower figures.

Other reports suggested a stronger pickup in economic growth in the third quarter than is currently anticipated. The goods trade deficit narrowed sharply, while wholesale and retail inventories increased in September.

“A lot of the pieces of the puzzle have come back together in a positive direction, with a pickup in the export of goods to the rest of the world and new-home sales,” said Chris Rupkey, chief economist at MUFG Union Bank in New York.

The Commerce Department said new-home sales increased 3.1 percent to a seasonally adjusted annual rate of 593,000 units last month, pulling them closer to a nine-year high reached in July. However, the pace for the previous three months was revised down by a total of 85,000 units from past estimates.

New-home sales, which are derived from building permits, are volatile and subject to large revisions.

Economists had forecast single-family home sales, which account for about 9.8 percent of overall home sales, falling to a rate of 600,000 units last month.

“The housing market may not be booming but it is clearly moving forward at a steady pace,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pa. “But the big problem is still the lack of inventory.”

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