New home sales in slow recovery

NEW YORK (CNNMoney.com) -- New home sales edged higher in September, according to government figures reported Wednesday, but the recovery from the all-time lows reached earlier this year remained slow.

Sales of newly built single-family homes rose to an annual rate of 307,000 units in September from 288,000 units the month before, the Commerce Department said.

The sales figure was higher that the annual rate of 299,000 expected by analysts surveyed by Briefing.com.

But the modest increase does not give "too much cause for hope," according to Celia Chen, a senior director at Moody's Analytics.

"Sales did rise which is good, but the pace is still very weak," Chen said. "It's still close to a record low. It just doesn't seem that demand is really firming."

The August sales were the third-lowest level since the Commerce Department started tracking new home sales in 1963, trailing only the 282,000 rate reported in May, and 285,000 in July.

The government said the median sales price of new homes was $223,800, up from $220,500 the month before.

That was one bright spot, according to Chen, but it might have had more to do with limited inventory than increased demand.

"There are not many of them [new homes] on the market, and inventories are very tight. Builders have just not been putting up a lot of homes," Chen said.

At the end of September, 204,000 new homes were for sale, equal to an 8-month supply at the latest pace.

A separate report issued Monday by the National Association of Realtors indicated that existing home sales climbed for the second month in a row in September.