2 minutes reading time (310 words)

U.S. October New Home Sales Jump Despite Higher Mortgage Rates

Getty Images

The numbers: U.S. new home sales rose 7.5% to a seasonally-adjusted annual rate of 632,000 in October from a revised 588,000 in the prior month, the Commerce Department reported Wednesday.

Analysts polled by The Wall Street Journal had forecast new-home sales to fall to a seasonally-adjusted annual rate of 570,000.

The data are often volatile. Sales in September were initially reported at 603,000.

Key details: The median sales price of new houses sold in October jumped to a record $493,000, up from $455,700 in the prior month.

The supply of new homes for sale rose 1.5% between September and October, equating to a 8.9-month supply at the current sales pace. This is up from a 5.7-month supply in January.

Regionally, sales rose sharply in the Northeast and the South but dropped in the Midwest and the South.

Big picture: New home sales continue to buck the trend in many housing indicators. With the Federal Reserve continuing to raise interest rates, mortgage rates have hit 20-year highs and affordability has been declining. There could be some buyers rushing to complete purchases before homes get even more expensive. Other analysts point to a high cancellation rate for new home sales that is not reflected in the data.

Looking ahead: “The median and average new home price delivered was sharply higher in October, suggesting the high-end consumer has been able to withstand the increase in mortgage payments. Overall, while the rebound was encouraging, this report does little to change the outlook that housing will remain a drag on economic growth for several more quarters,” said economists at Contingent Macro.

Market reaction: Stocks were higher in early trading on Wednesday. The yield on the 10-year Treasury note slipped to 3.72%.

The post U.S. October New Home Sales Jump Despite Higher Mortgage Rates appeared first on Real Estate News & Insights | realtor.com®.

Remine CEO Frederick Townes resigns after 7 months

Related Posts

Comment for this post has been locked by admin.
 

Comments

Comments are not available for users without an account. Please login first to view these comments.
LikeRE Logo