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In October, sales of new American single-family houses dipped to a more than 2-1/2-year minimum against the backdrop of steep dives in all four regions. That’s further evidence that higher mortgage rates were having an impact on the housing market.
The Commerce Department announced that new home sales sank by 8.9% hitting a seasonally updated annual rate of up to 544,000 units in October. It turned out to be the lowest value since March 2016. Moreover, the percent dive appeared to be the most impressive since December last year.
September's sales tempo was updated upwards to nearly 597,000 units from the previously disclosed 553,000 units.
Financial analysts had foreseen new home sales, amounting to approximately 9.4% of housing market sales, edging up by 3.7% to a tempo of 575,000 units in October.
New home sales are normally drawn from permits. They’re used to weaving on a month-to-month basis. From 2017, they dived by 12%.
The previous week’s data disclosed mild leaps in sales of previously owned houses as well as homebuilding in October. Eventually, the housing market is taking a hit from greater borrowing costs, which push homeownership out of the reach of a great number of employees.
As a matter of fact, the 30-year fixed mortgage rate amounts to 4.81%, which is not far from a seven-year maximum of 4.94%, as follows from data revealed by mortgage finance firm Freddie Mac.
While house price inflation is speeding down because demand for home purchases recedes, it proceeds with outpacing wage surge. In September, house prices headed north by up to 5.1% year-on-year. In October, wages managed to inch up by 3.1% from 2017.
House price surge has been powered by a shortage of properties available for sale.
As for the median new house price, in October, it sank by 3.1% reaching $309,700 from 2017.
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