Numbers: New home sales in the United States rose 0.4% from 742,000 last month to a seasonally adjusted annual rate of 745,000 in October, according to the Department of Commerce.
Due to the small sampling size, sales data is often significantly modified. Sales in September were initially estimated at 800,000 units.
Analysts surveyed by The Wall Street Journal predicted that new home sales in October would be stable at 800,000 units.
Important details: The average selling price of new homes sold in October was $ 407,700, a record high. The supply of new homes for sale increased by 3.3% between September and October, equivalent to a supply of 6.3 months.
Regionally, sales were strong in the Midwest, increased slightly in the South, but decreased in the Northeast and West.
Big picture: New home sales play an important role in a market where housing costs continue to rise. One of the main reasons home prices continue to rise is that there aren’t enough homes around to meet the demands of buyers. As existing homeowners hesitate to list their properties for sale, inventory tightness has worsened for over a year, and competition among buyers has intensified and prices have skyrocketed.
Chief Economist Daniel Hale said: Realtor.com.. But as she warns, there is a big problem.
“Many new homes for sale are under construction or haven’t started yet,” Hale said. “In other words, they aren’t completely ready to move and aren’t ideal for home shoppers who want to settle down.”
Homebuilders have been hampered by unprocessed construction materials and labor shortages. Not only did this extend the schedule for most construction projects, but it also increased the price of new homes. Mortgage rates are expected to rise in the coming months, raising concerns that more and more buyers may be priced from the market.
Market reaction: stock
It was lower on Wednesday, expecting the Federal Reserve to decide to “taper” asset purchases at a faster pace next month. The purchase of assets was a signal to the market that short-term interest rates remained close to zero.
U.S. home sales increase 1 inch in October
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