New home sales were up slightly in October, a good sign for an industry weary of hard times.
It’s a long way to recovery but any small step forward is welcome news to builders and Realtors struggling to keep positive. A report found new home sales rose 1.3 percent in October.
The 307,000 new homes sold are less than half what the Commerce Department says must be sold to sustain a healthy market. Purchase of new homes is a small part of the real estate market but it’s a widely watched indicator of the overall economy.
Builders estimate each home constructed creates an average three jobs for a year and generates $90,000 in tax revenue. Many builders have pulled back on constructing “spec” homes. They want to be assured of a quick sale when they complete a project.
With interest rates at record lows, many traditional builders have turned to remodel projects financed by refinances and second mortgages to keep crews busy in slower times.