New homes sales in the United States edged higher in October but missed analyst expectations as home prices hit a new record, according to government data released Wednesday.
Sales of newly built properties last month climbed 0.4 percent to a seasonally adjusted rate of 745,000, according to the Commerce Department, lagging analysts estimates. The government also reported a sharp downward revision for September’s sales.
The housing market remains strong, although sales have ebbed compared with the year-ago period when the pandemic was more disruptive to daily life, while prices have risen.
The market has also been constrained by limited supply, which climbed modestly last month. There are now 6.3 months of supply available at current sale rates, up from 6.1 months in September, according to the data.
The average home price in October jumped to a record of $477,800, up 21 percent from a year-ago.
Nancy Vanden Houten of Oxford Economics predicted sales would “improve slightly” in the fourth quarter with strong demand, but added that high prices “will force many buyers to the sidelines.”
But Rubeela Farooqi of High Frequency Economics said some buyers will likely accelerate purchases in anticipation that lending rates will soon rise.
“Prices remain high but gradually rising inventories should limit further acceleration,” she said in a note. “Fears of higher mortgage rates as the Fed tapers should bring at least some buyers into the market.”
