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September New Home Sales Rise by 6.6 Percent

A statement released by the U.S. Commerce Department stated that new home sales for single-family homes rose by 6.6 percent in September 2010.

The increase surpasses private-sector expectations of 4.2 percent, according to the statement.

“Today’s data showed relatively strong single-family home sales in September compared to expectations,” said U.S. Commerce Department Under Secretary for Economic Affairs, Rebecca Blank. “While we’re seeing improvement, the overall housing sector still faces substantial challenges, including the large supply of existing homes on the market, and activity remains at a low level. However, falling prices and historically low mortgage rates have created a favorable environment for many households that are ready to buy a home.”

While the improvement in sales holds promise for the future of the housing market, the National Association of Home Builders (NAHB) hopes further improvement in other areas of new-home construction will improve as well.

“The fact that new-home sales are finally moving in the right direction – albeit slow – is definitely good news following an exceptionally quiet summer at builders’ sales offices and model homes,” Bob Jones, the NAHB  chairman told the NAHB.

Jones believes one of the major hurdles the new-home construction market will have to overcome is lack of available credit. In order for builders to meet the steadily improving demand for new homes, they must have credit to finance the projects.

According to the NAHB, sales decreased by 9.9 percent during September in the western region of the U.S., which includes the state of Utah.