FX.co ★ U.S. New Home Sales Pull Back Much More Than Expected In October

A recent report from the Commerce Department, released on Tuesday, highlights a significant decline in new home sales in the U.S. for October. According to the data, new home sales experienced a sharp downturn of 17.3%, dropping to an annual pace of 610,000 units, following a 7.0% increase to 738,000 in September. This decline surpassed economists' predictions, who had anticipated a modest decrease of 1.1% to 730,000 homes.

This substantial reduction moved new home sales considerably away from their peak last year, marking the lowest rate seen since reaching 596,000 in November 2023.

The decline was most pronounced in the South, where new home sales fell by 22.7% to an annual rate of 339,000 units. The West also saw a reduction, with sales descending by 9.0% to 152,000 units. Conversely, the Northeast experienced a surge, with new home sales soaring by 53.3% to an annual pace of 46,000, while the Midwest witnessed a rise of 1.4%, reaching an annual rate of 73,000.

In terms of pricing, the median sales price for new homes in October was reported at $437,300, reflecting a 2.5% increase from $426,800 in September, and a 4.7% rise from $417,500 in the same month of the previous year.

The inventory of new homes available at the end of October amounted to 481,000, equating to 9.5 months of supply based on the current sales rate. This is an increase from the 7.7 months of supply noted in September and 7.9 months one year prior.

Separately, the National Association of Realtors released data last Thursday indicating that existing home sales in the U.S. rebounded more robustly than expected in October. Existing home sales surged by 3.4% to an annual rate of 3.96 million units, recovering from a 1.3% decline to 3.83 million in September. Economists had projected a 2.3% increase to 3.93 million, from the originally reported 3.84 million for the previous month.