US New Home Sales in October Slowed Down by Rising Mortgage Rates

Sales of new U.S. single-family homes dropped 5.6% in October, more than expected, as higher mortgage rates deterred buyers despite builders cutting prices. However, the decline is likely temporary due to a persistent shortage of previously owned houses on the market. The supply of existing homes is nearly 50% below pre-pandemic levels, leading to increased demand for new construction. While the median house price plunged 17.6% from a year ago, economists caution against reading too much into this figure, as it does not account for changes in the mix of sales. With mortgage rates expected to fall again, a rebound in new home sales is anticipated.