U
S new single-family home sales plummeted to a nearly two-year low in October, likely due to rising mortgage rates and hurricane disruptions. According to the Commerce Department's Census Bureau, sales dropped by 17.3% to a seasonally adjusted annual rate of 610,000 units, the lowest level since December 2022.

    The September sales pace remained unchanged at 738,000 units, while year-over-year sales decreased by 9.4%. Economists had forecasted a slower pace of 725,000 units. New home sales are volatile on a month-to-month basis and account for about 15% of US home sales.

    Mortgage rates have surged since the Federal Reserve began cutting interest rates, with the average 30-year fixed-rate mortgage jumping to 6.72% by October's end. Expectations of fewer rate cuts next year have been strengthened by concerns over a potential resurgence in inflation.

    Regional sales data showed significant declines: 27.7% in the South due to hurricane disruptions, and 9.0% in the West. However, sales rose 1.4% in the Midwest and soared 53.3% in the Northeast. The median new home price increased by 4.7% to $437,300, while the inventory of new homes reached 481,000 units, the highest level since early 2008.

    At October's sales pace, it would take 9.5 months to clear the current supply of houses on the market, up from 7.7 months in September.