With 632,000 properties sold in October, the sales volume shows an increase of 7.5% compared to last September, but a decrease of 5.8% compared to October 2021.
US new home sales rose in October from a month earlier but are below a year-ago pace as prices remain elevated despite the Fed’s action and its impact on home lending.
632,000 new homes were sold last month, up from 588,000 the previous month, according to Commerce Department data released Wednesday, but the data was revised downwards from the initial release of 603,000.
If the sales volume is up 7.5% compared to September, the decline is 5.8% compared to October 2021.
Sales are also higher than analysts’ expectations, which predict rather 578,000 new homes sold in October, according to the consensus published by briefing.com.
“New home sales have unexpectedly increased. Overall though, sales are down sharply and pressure is expected to remain strong in the near term, due to low inventories, still high prices and rising interest rates for home loans,” he said in a statement. Rubeela Farooqi, chief economist for the UK States at the HFE.
For his part, Kieran Clancy, chief US economist at the Pantheon, stressed that “sales of new homes are down nearly 40% from their end-2020 peak but the decline in demand is not yet reflected in prices.
The median selling price is still $493,000. The average price is $544,000.
This is the highest average price observed over the past 12 months, while the average remains close to that observed last summer.
The Federal Reserve is trying to limit inflation, which fell to 7.7% in October according to the benchmark CPI. The Fed has raised rates at historic speed, with these hikes affecting mortgage rates, which now exceed 7% for a 30-year loan.
