New single-family home sales in October were at a seasonally adjusted annual rate of 679,000 units.
New home sales fell 5.6% in October as mortgage rates hit new highs and housing demand slumped.
New single-family home sales in October were at a seasonally adjusted annual rate of 679,000 units, down 5.6% from the level recorded in September but up 17.7% from a year ago, according to the U.S. Census Bureau. .according to The data was released on Monday.
Experts said the decline comes as mortgage interest rates have reached as high as 8%, averaging 7.62% for the month of October, forcing some would-be homebuyers to postpone their purchases. It is said that
Holden Lewis, housing and mortgage expert at personal finance website NerdWallet, said in a statement: “Many new homes will be purchased in October as prospective buyers postpone their purchases in hopes of lower mortgage rates. The number of people has decreased.”
Sales were still increasing year over year as buyers continued to turn to new construction inventory to make up for the lack of resale inventory, in part due to high mortgage rates.
“Despite challenging conditions, sales are up 4.6% year-to-date due to inventory shortages in the resale market,” said Alicia Huey, president of the National Association of Home Builders.
The median sales price for new homes sold in October was $409,300, down 3.1% from September and 17.6% from a year ago. Experts attribute the drop in prices to higher home loan interest rates and builders shifting their activity toward smaller, more affordable homes, setting prices at which homes are sold. It is said that it is.
“As the size of new homes shrank in 2023, the median price of new homes declined,” said Robert Dietz, chief economist at NAHB. “Combined with sales incentives and a lack of resale inventory, demand should remain strong in 2023 and improve in 2024 as interest rates fall.”
In October, the inventory of new single-family homes increased by 8.3% to 439,000 units. This is the highest level since January and equates to 7.8 months of supply at the current construction pace.
Newly built homes accounted for 30% of the total inventory of homes for sale that month, compared to the historical average of 12%.
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