According to a report by Reuters, sales of new single-family homes in the United States saw a larger-than-anticipated decline in October. The U.S. Commerce Department’s Census Bureau reported that these sales dropped 5.6% to an annual rate of 679,000 units, as buyers were deterred by higher mortgage rates despite price cuts from builders. This figure was also revised downward from September’s initial estimate of 719,000 units.
The decrease in sales aligns with reports from the National Association of Realtors and homebuilder sentiment surveys showing declines for existing-home and new-home markets respectively. However, there is potential for a rebound as mortgage rates have recently decreased after reaching two-decade highs.
Nationwide economist Daniel Vielhaber stated to Reuters that while this decline may seem significant compared to historical standards, the market for new homes remains strong due to low inventory levels for existing homes.
This post originally appeared on Connect CRE.