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New-Home Sales Drop 0.3%, Cast Shadow on Recovery

New U.S. single-family home sales fell slightly in October and the government revised sharply lower its estimate for the prior month's sales, casting a small shadow over what has been one of the brighter spots in the U.S. economy.

Phillip Spears | Digital Vision | Getty Images

The Commerce Department said on Wednesday sales dropped 0.3 percent last month to a seasonally adjusted 368,000-unit annual rate.

Government data for new-home sales are subject to substantial revisions. Indeed, the Commerce Department cut its estimate for sales in September by 20,000 to a 369,000-unit rate.

The data leaves the pace of new-home sales just below the pace reported in May, suggesting little upward momentum the market for new homes.

Still, the report gave some upbeat signals that reinforced the housing sector as a point of strength in an economy beset by flagging business confidence and cooling demand abroad. The median home price of a new home rose 5.7 percent from a year ago.

Economists polled by Reuters had forecast sales rising to a 390,000-unit rate last month from the previously reported 389,000-unit rate.

The Commerce Department said superstorm Sandy at the end of last month probably had a "minimal" effect on sales activity, and did not affect collection of data

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