U.S. New Home Sales Fall 17.3% in October 2024
New home sales in the United States plummeted 17.3% to a seasonally adjusted annual rate of 610,000 units in October, the lowest level since December 2022, according to the Commerce Department's Census Bureau. This decline was largely attributed to rising
New Home SalesMortgage RatesHousing MarketReal EstateEconomic IndicatorsReal Estate NewsNov 27, 2024
Mortgage rates have seen a significant reversal, climbing back from a 1-1/2-year low of 6.08% at the end of September. The average rate on a 30-year fixed-rate mortgage rose to 6.72% by the end of October, aligning with the rise in 10-year U.S. Treasury yields. This increase was driven by strong domestic data suggesting a slower path of rate cuts by the Federal Reserve. The 30-year fixed-rate mortgage averaged 6.84% last week.
Several factors contributed to the decline in new home sales. Notably, the densely populated South region saw a dramatic drop of 27.7%, likely due to disruptions caused by hurricanes. The West region also experienced a decline of 9.0%, while the Midwest saw a slight increase of 1.4%. The Northeast region showed a surprising surge of 53.3% in new home sales.
The median price of a new house increased by 4.7% to $437,300 in October compared to the previous year. The inventory of new homes rose to 481,000, the highest level since early 2008, up from 471,000 units in September. At the current sales pace, it would take 9.5 months to clear the supply of houses on the market, up from 7.7 months in September.
The downturn in new home sales is a reflection of the broader economic conditions, including the impact of rising mortgage rates and natural disasters. The housing market is closely monitored as a key indicator of economic health, and this significant drop in sales is raising concerns among economists and policymakers alike.
Frequently Asked Questions
What is the current rate of new home sales in the U.S.?
As of October 2024, new home sales in the U.S. dropped to a seasonally adjusted annual rate of 610,000 units, the lowest level since December 2022.
How much did mortgage rates increase by the end of October 2024?
By the end of October 2024, the average rate on a 30-year fixed-rate mortgage increased to 6.72%, up from a 1-1/2-year low of 6.08% at the end of September.
Which region saw the most significant decline in new home sales?
The South region saw the most significant decline, with new home sales plummeting by 27.7% in October 2024.
What is the current median price of a new house in the U.S.?
The median price of a new house in the U.S. increased by 4.7% to $437,300 in October 2024 compared to the previous year.
How long would it take to clear the supply of houses on the market at the current sales pace?
At the current sales pace, it would take 9.5 months to clear the supply of houses on the market, up from 7.7 months in September 2024.
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