Economic data revealed a decline in new home sales in the United States last month, following a decline in the previous month—according to revised data—due to the impact of mortgage interest rates on housing demand.
The U.S. Department of Commerce reported that single-family home sales fell by 5%.6 percent in October to an annualized rate of 679,000 homes, which was lower than the forecasts of analysts surveyed by Bloomberg News.
Although sales have declined over the past two months, they have generally risen compared to last year, as higher mortgage rates have discouraged homeowners from selling their homes and moving to new ones. Nevertheless, construction companies have been forced to attract buyers through financial incentives on prices and interest rates amid rising prices.
The average interest rate on mortgage loans rose last month to about 8%, then fell afterward due to expectations that the cycle of monetary policy tightening in the United States was nearing an end.
At the same time, average home prices in the U.S. fell last month to $409,300 per home, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development. Although the price is down by approximately 17% from last year, it remains higher than pre-pandemic levels prior to the COVID-19 outbreak in 2020.
