New home sales tick up nationwide - KWWL - Eastern Iowa Breaking News, Weather, Closings

New home sales tick up nationwide

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WASHINGTON, D.C. (KWWL) -

Sales of new homes rose in September after four straight monthly declines, largely because builders cut their prices in the face of depressed demand.  Analysts say the modest increase on the back of reduced prices suggests the struggling housing market is years away from a turnaround.

The U.S. Commerce Department said Wednesday that sales increased 5.7 percent last month to a seasonally adjusted annual rate of 313,000 homes.

Still, sales rose after hitting a six-month low in August.  The annual pace remains less than half the 700,000 that economists say must be sold to sustain a healthy housing market.  A big reason for the gain was that the median sales price fell 3.1 percent to $204,400 -- the lowest since October 2010.  The number of new homes on the market was also unchanged at 163,000, a record low.

For many, buying a home is too big a risk, even with mortgage rates near historic lows.  Others can't qualify for loans or meet higher down payment requirements.

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