New home sales in the United States fell short of analyst expectations in October, hitting the lowest rate since late 2022, according to government data released Tuesday, with mortgage rates ticking up during the month.
Sales of new homes came in at a seasonally adjusted annual rate of 610,000 last month, Commerce Department data showed, down 17.3 percent from September.
The September rate was notably higher at 738,000, and analysts had expected a smaller cooling to 718,000 according to Briefing.com.
The property maket is sensitive to interest rate changes and took a hit after the Federal Reserve quickly hiked the benchmark lending rate in 2022 to stamp out surging inflation.
With homeowners reluctant to sell their existing properties, though, sales of new homes got a boost from spillover demand.
The figure in October was the lowest since late 2022, and comes as the popular 30-year fixed-rate mortgage edged up in the month.
The median sales price of new homes last month, meanwhile, climbed to $437,300, said the Commerce Department.
“High mortgage rates and prices continue to impact affordability,” said economists Carl Weinberg and Rubeela Farooqi of High Frequency Economics.
While the Fed has started lowering interest rates, providing some support to the housing sector in time to come, “anyone who can postpone a home purchase probably will, to realize even lower mortgage rates six or 12 months from now,” they added in a note.
Economists expect it will take time for the housing sector to recover from the period of high interest rates.
