New home sales stagnant, cast shadow on housing

Housing--you think everything is coming up roses? Think again--

New home sales stagnant, cast shadow on housing | Reuters:" Wednesday's data did not change the view that housing is still in recovery mode, although the pace of new home sales in October was below the level of May, suggesting little upward momentum. "It's just that progress will be slow," said Yelena Shulyatyeva, an economist at BNP Paribas in New York. U.S. homebuilder stocks fell, even as broad market indexes rose slightly. . . Wednesday's report showed the median sales price for a new home in October was 5.7 percent higher than a year earlier, but the pace of year-over-year price gains slowed for a second straight month. . . . "Some of this could potentially be Hurricane Sandy," said Megan McGrath, an analyst at MKM Partners in Stamford, Connecticut. However, the Commerce Department said the storm did not affect data collection at all and its impact on the pace of sales was likely "minimal." Economists polled by Reuters had forecast sales rising to a 390,000-unit rate last month from September's previously reported 389,000-unit rate. To provide support for the housing market, the Federal Reserve has kept interest rates at rock-bottom levels since 2008. In September, it launched an open-ended program to buy mortgage-backed securities, driving mortgage rates to record lows."

In other words, the Fed is out of bullets--housing is going to be long, slow recovery.

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