September new home sales up from August, but hold off on the cheering

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Nationwide new home sales were up 2.7% in September from August, the U.S. Commerce Department said in a report today, surprising some analysts who anticipated another month-to-month decline. But the September estimated annual sales rate of 464,000 single family homes was down 33% from September 2007.

This isn’t the first such uptick, however. Last year, the August-September bounce was even greater, at 4.8%.

August 2008 was also a very poor month for new home sales -- they were down 35% from August 2007 -- making it easier for September to post an increase.

September new home sales were strongest in the West, where sales were up 23% from August, offsetting declines in the South, Midwest and Northeast. But Western sales were down 38% in September from the same month a year ago.

Year-to-year gains also need to be weighed against the dismal sales totals of last year. In September 2007, new home sales had dropped 23% from the same month a year before, and sales in the West were down 12%.

Anyone calling a housing market bottom based on the August-September bounce would still be going out on a limb. September inventory is at 10 months, down from August but up 10% from a year ago.

--Peter Y. Hong