- THE MAGAZINE
Commerce said purchases of new single-family homes fell 3.5 percent to a seasonally adjusted 1.105 million annual rate, a slower pace than Wall Street analysts had projected. The October sales rate was the weakest since May's 1.081 million pace.
September sales, initially reported as a 0.2 percent decline, were revised to a 1.9 percent drop after an upward revision to August sales.
The report shows the housing market, which surged earlier in the year on the back of extremely low mortgage interest rates, is losing a bit of its bounce as rates have backed up a bit in recent months.
"Home sales were off a bit, that was the message from the mortgage application numbers over the last couple months but the applications have risen again in the last couple of weeks. So I wouldn't extrapolate this decline in home sales too far," said Jim O'Sullivan, economist with UBS Warburg in Stamford, Connecticut.
On Tuesday, the National Association of Realtors said sales of previously owned homes had fallen by 4.9 percent in October, though the pace of sales was still the third fastest on record.
According to mortgage finance giant Freddie Mac, the average rate on conventional 30-year mortgage actually fell slightly in October, to 5.95 percent from 6.15 percent in September. Still, that was well above the 5.23 percent rate seen in June.
In the Commerce report, sales were down in all regions. Sales in the Northeast fell by 3.3 percent, while sales in the Midwest dipped by 0.5 percent. The two biggest markets for new homes, the South and the West, saw declines of 1.0 percent and 9.4 percent. The drop in the West region was the largest since July.
The inventory of homes on the market rose in October. The supply of homes for sale totaled 4.0 months worth at the current sales pace, up from the 3.7 months' supply seen in September and the highest level since April.
The median price for a new home, however, gained in October, rising to $190,900 from $189,900 in September, Commerce said. Price data is not adjusted for seasonal variations.