Builders in the U.S. sold fewer new homes than forecast in October and purchases were revised down for the prior month, highlighting the hurdles facing a rebound in the industry at the heart of the financial crisis.
Sales dropped 0.3 percent to a 368,000 annual pace following a 369,000 rate in September that was 20,000 lower than initially reported, figures from the Commerce Department showed today in Washington. The median estimate of 74 economists surveyed by Bloomberg projected a 390,000 pace.
The report runs counter to recent data showing gains in residential construction, builder confidence and mortgage applications that indicate housing is on the verge of contributing more to economic growth. Easier access to credit and more employment are still needed to ensure the real-estate rebound is sustained — one reason why Federal Reserve Chairman Ben S. Bernanke has pledged to maintain record stimulus.
“Better job growth is the key factor,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, who projected a 365,000 rate of sales. “We really have a lot of ground to make up from the recession.”
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