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NEW YORK (CNN/Money) -
Sales of new homes rose in September, according to a report released Thursday, although the overall sales rate fell short of analysts' estimates.
The Commerce Department said sales of new homes climbed 2.1 percent to 1,222,000 at an annualized rate from a revised 1,197,000 in August.
Economists were looking for new sales of 1,250,000, according to Briefing.com.
Although the September sales are a 2.1 percent increase over August, they are a 0.1 percent decline from September 2004, according to the report.
The median sales price in September was $215,700, a 1.9 percent increase over the median price in September 2004.
Although the year-over-year price increase seems small and is slowing from previous months, Wachovia economist Mark Vitner said that has more to do with developers bringing more low-cost homes to market than it does any price slow down.
"They still look incredibly strong," said Vitner. "(Housing bubble proponents) will jump on any number that shows a hint of softness, but I don't think this was it."
Thursday's figures comes after a report Tuesday which showed the pace of existing home sales unchanged.
The National Association of Realtors' report on existing home sales showed an annual rate of 7.28 million in September, matching August's pace.
The pace of sales tied the second best month on record, behind only the 7.35 million annual sales rate in June.
Thursday's price increases indicate no let up in the frenzied pace of real estate appreciation.
But some economists have questioned whether the strong sustained rise in home values in recent years is due for a significant correction, especially if mortgage rates rise and drive up the cost of home ownership.
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