American new home sales head south to 2-1/2-year minimum

American new home sales head south to 2-1/2-year minimum

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.

Similar

Market updates on August 15

The risk sentiment remains under pressure after the comments by China about the countermeasures against the US tariffs. Thus, the AUD/USD and the USD/JPY pairs will be under our attention.

Latest news

German exporters don’t care about stronger euro

German exporters demonstrate ascending optimism as for their business prospects because growing demand from other euro zone countries helps to compensate worries regarding the strengthening currency, as the Ifo economic institute told on Wednesday…

Japan's October machinery orders tack on

In October, Japanese machinery orders rebounded with a faster soar than anticipated, thus re-affirming the resilience of capital spending, which is a major driver in the Japanese economy's almost two-year expansion…

Deposit with your local payment systems

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Internal error. Please try again later

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera