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New homes were selling last month — at least until the financial crisis

October 27th, 2008

It seems that the financial crisis arrived last month at a time when new home sales were finally kicking into gear.

Seasonally adjusted new home sales contracts jumped unexpectedly by 2.7% last month, the Commerce Department said today. But it's likely that many of those contracts were signed before Lehman Brothers collapsed on September 15 and credit markets seized up.

We'll have to wait until next month to really get a sense of how that impacted builder sales. It's clear that builders were cutting prices dramatically and buyers were taking advantage of the discounts. The median new home price fell 9% in September from a year earlier.

Entry Filed under: News