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New home sales rose in October, but are still trending to a low annual rate, according to data released Monday by the US Commerce Department. Sales of new single-family homes last month were at a seasonally adjusted annual rate of 307,000. That's up slightly more than 1% from the revised September rate and nearly 9% above the October 2010 rate.  The median sales price of new homes sold in October was $212,300, below the $213,300 price in September but up from $204,200 in October 2010. The average sales price of $242,300 in October was down from $248,400 in September and from $254,400 in October 2010.  But, as IHS economist Patrick Newport noted, the market conditions for single-family home sales are bad.

Tight credit for builders, falling home prices and high foreclosures and delinquencies continue to hold the new-home market back.  "This is shaping up to be the worst year on record for the single-family housing market," Newport said in a note. He cited that data for new home sales, single-family housing starts and single-family permits will set record lows this year. Builders say there has been marginal improvement in some markets with better economies.  "While this trend is encouraging, overall
sales activity is still well below normal due to the effects of overly tight credit conditions for builders and buyers, the continued flow of distressed properties on the market and inaccurate appraisal values on new homes," said Bob Nielsen, chairman of the National Association of Home Builders. There was a 6.3-month supply of new homes at the current sales pace in
October.