New home sales rose a bit in October, but the level of demand is historically very weak because of high-unemployment in the U.S. and competition from cheaper existing homes.

Sales increased by 1.3% to a seasonally adjusted annual-rate of 307,000 from a downwardly revised speed of 303,000 in September, the Commerce Department said.

Economists surveyed by Dow Jones Newswires had estimate sales would slip by 0.3% to an annual-rate of 312,000.

The average price in October for a new home was $212,300, higher than the level of $204,200 a year earlier and as yet down from the month earlier.

Uncertainty in the direction of home prices can give would-be buyers second thoughts, with some of them waiting for a better deal. Owners who want to sell, on the other hand, tend to take their property off the market until prices steady a trend that adds to inventory in the future and depresses-prices further.

New homes are, generally, more expensive than previously owned property. People have been particularly attracted to foreclosed homes because of the low-price tags.

New-home sales amount to about a quarter of their peak before the bubble began deflating around five years ago. Sales are way below healthy levels, considered to be an annual rate of around 750,000.

Year over year, new-home-sales were 8.9% above the October 2010 level.

Because many people have much of their net worth tied up in their homes, the bursting of the price bubble made consumers feel less wealthy and discouraged spending. The economy slouches from late 2007 to mid 2009. It has been trying to retrieve strongly but unemployment stays high.

For the housing sector to recover, the economy needs to create more jobs and housing prices must steady. But economists think prices will keep falling because the foreclosure-pipeline is long. Falling prices pull more homes “underwater,” which mean the owners owe more on their mortgages than the property is worth. That leads to more foreclosures and lower prices.

With builders pessimistic, the no of new-homes listed for sale at the end of October was 162,000, which is historically low. That supply would take 6.3 months to reduce at the current sales speed and is around a healthy-level. The supply in September was 6.4 months.

The Commerce statement said October new home sales were mixed. New home Sales rose 14.9% in the West and 22.2% in the Midwest. Sales were flat in the Northeast and fell 9.5% in the South.

India’s GDP (gross domestic product) increase stands revised upwards to 8 per cent for 2009-10 from the 7.4 per cent expansion estimated former for the fiscal, mainly on the strength of better showing by sectors such as developed and services.

According to the ‘Quick estimates of national income, consumption expenditure, saving and capital formation for 2009-10′ released by the Central Statistical Organization here on Monday, the higher GDP increase rate during 2009-10 has been achieved due to high growth in manufacturing (8.8 per cent), financing, insurance, real estate as well as business services (9.2 per cent), transport, storage and communication (15 per cent), community, social and personal services (11.8 per cent).

At factor cost

The country’s GDP at factor price at constant (2004-05) prices in 2009-10 is estimated at Rs.44.94 lakh crore as against Rs.41.63 lakh crore in 2008-09, which works out to an overall economic expansion of 8 per cent during the year. At current prices, however, it is estimated much higher at Rs.61.33 lakh crore as alongside Rs.52.82 lakh crore in 2008-09 to show an increase of 16.1 per cent for the year.

Although the higher GDP enlargement in 2009-10 signals a faster economic recovery from the slowdown in the wake of the global financial crisis, it also goes on to offer an adverse statistical impact by way of a high base effect to pull down the anticipated expansion during the current fiscal (2010-11) to the lower end of the 8.5-9.0 per cent range.

The CSO data showed that the per capita income (per capita net national income at factor cost) in real terms (at 2004-05 prices), is probable at Rs.33,731 for 2009-10 as against Rs.31,801 in 2008-09 to mark an enlarge of 6.1 per cent during the year, the CSO data showed.At current prices, however, it is expected at Rs.46,492 during the year as against Rs.40,605 for the previous year to post a increase of 14.5 per cent.