To: Kenneth E. Phillipps who wrote (715712 ) 11/29/2005 3:41:06 PM From: Hope Praytochange Read Replies (1) | Respond to of 769669 kennyboy: this is really hurt kennyboy heart Sales of New Homes Stay Strong in October, Setting Record By VIKAS BAJAJ Sales of new homes surged to a record in October, the government reported today, bucking recent reports of a slowdown in the roaring housing market. New home sales jumped 13 percent last month, to an annual pace of 1.42 million, and selling prices increased modestly, the Commerce Department said. The report comes a day after the National Association of Realtors said existing home sales fell 2.7 percent last month and inventories rose to their highest levels in more than two years. The positive housing news was accompanied today by two reports that showed a sharp rise in consumer confidence this month and higher orders for big-ticket goods like planes in October. New home sales, which account for about 15 percent of the overall housing market, tend to increase and decrease more erratically from month to month than the far bigger base of existing home sales. Also, the Commerce Department records sales when contracts are signed, rather than when transactions are closed as the Realtors association does for existing home sales. Economists had expected new home sales to dip to 1.2 million, according to a survey by Bloomberg News, and analysts cautioned that last month's surge might not be an indicator of a larger trend. Experts noted that the median sales price - half the homes sold for more and half for less - of $231,300 was up just 1.6 percent from September and 0.9 percent from October 2004. "It's not 100 percent clear where housing really is," said James O'Sullivan, an economist at UBS. "But the weight of the evidence is that it's not as strong as this number on new home sales implies." Mr. O'Sullivan noted that mortgage applications have fallen in recent months as interest rates have climbed, though they remain close to historic lows. Also, homebuilders are seeing fewer buyers, according to surveys by the National Association of Homebuilders. New home sales were strongest in the West, where they soared by 46.9 percent, to an annual pace of 457,000, and in the Northeast, where they jumped 43.3 percent, to 86,000. Sales rose by 1.9 percent in the South and fell 9.5 percent in the Midwest. In other economic news, the Conference Board said that its consumer confidence index surged by 13.7 points, to 98.8, after falling for the previous two months. It credited an improving job outlook and falling gasoline prices, which at an average of $2.16 a gallon are below where they were before Hurricane Katrina struck New Orleans. "While the index remains below its pre-Katrina levels, the shock of the hurricanes and subsequent leap in gas prices has begun wearing off just in time for the holiday season," Lynn Franco, the board's director of consumer research, said in a statement. American manufacturers, particularly aircraft makers, also appear to be in better spirits. The Commerce Department said today that orders for durable goods - or products that last for more than three years - surged by 3.4 percent last month after falling by 2 percent in September. Economists had been expecting an increase of 1.6 percent, according to a survey by Bloomberg News. Orders for defense aircraft and parts more than doubled to $7 billion in October, after falling by 2.7 percent in September. Commercial plane orders saw a dramatic 50.4 percent increase, to $11 billion, after dropping by 41.5 percent the month before. Some of the rise was related to the end of a machinists' strike, which hurt production at Boeing in September. Excluding the transportation sector, however, orders rose just 0.3 percent, far slower than the 1 percent increase forecast by analysts. Orders excluding transportation dropped 0.2 percent in September, a figure the Commerce Department revised today from the 1 percent decline it had reported earlier. Economists have been predicting a rebound in manufacturing activity because purchasing managers have appeared more optimistic in recent surveys after an slowdown earlier this year. Also, the nation's overall industrial output bounced back sharply in October after falling in the aftermath of the Gulf Coast hurricanes.