In a sign that the housing market is not deteriorating further, the U.S. Census Bureau reports sales of new single-family houses in October 2011 rising 1.3% to a seasonally adjusted annual rate of 307,000.
This is an increase above the revised September rate of 303,000 units sold and is 8.9% above the October 2010 estimate of 282,000. The median sales price of new houses sold in October 2011 was $212,300 while the average sales price was $242,300.
The seasonally adjusted estimate of new houses for sale at the end of October was 162,000, representing a supply of 6.3 months at the current rate of sales.
The surprising resilient housing number is a positive for the economy and follows a stronger-than-expected increase in Black Friday shopping, with consumers spending a record $52.4 billion on Friday.
With the monthly U.S. unemployment rate averaging 9 percent this year, the results suggest consumers with jobs remain willing to spend.
Retail stocks rose as the Standard & Poor’s 500 Retailing Index increased 3.5 percent to 517.97 at 10:03 a.m. in New York. Macy’s Inc., Amazon.com Inc. and Abercrombie & Fitch Co. led the gains by all advancing more than 4 percent.
Consumer spending, which accounts for about 70 percent of the economy, grew at a 2.3 percent annual rate in the third quarter, the fastest pace of 2011, the Commerce Department said Nov. 22. The nation’s savings rate fell, suggesting some consumers used their nest eggs to keep spending.
The Dow gained 300 points in early trading today, on signs of strength in the U.S. economy, but more so on the news that the IMF may be riding to the rescue of Italy and other troubled Eurozone economies.