US new home sales slow more than expected in November

New home sales in the United States cooled in November to the lowest rate in a year, the Commerce Department said – Copyright AFP/File Frederic J. BROWN

Sales of new US homes cooled more than anticipated in November, slipping to the lowest level in a year, according to government data released Friday.

The market for new properties has been boosted in recent months by a lack of existing homes, as high mortgage rates dissuaded homeowners — who previously locked in lower rates — from putting their real estate up for sale.

Last month, sales of new single‐family houses came in at a seasonally adjusted annual rate of 590,000, around 12 percent below October’s figure, the Commerce Department said.

This was slightly above November 2022’s pace of 582,000, however, the report added.

The median sales price of new homes sold also rose, reaching $434,700 in November.

Analysts noted Friday that home sales data can be volatile and subject to revision.

While the latest weakness appears to reflect elevated mortgage rates earlier in the year, rates have since come down.

This, combined with the persistent lack of supply in existing properties — which forms the bulk of the market — could still bolster new home sales in the coming months.

According to home loan finance company Freddie Mac, the popular 30-year fixed-rate mortgage remained below seven percent for a second week straight as of Thursday. It averaged 6.7 percent.

Rates were above seven percent for 17 consecutive weeks prior, Freddie Mac added.

This is “bringing potential homebuyers who were previously waiting on the sidelines back into the market and builders already are starting to feel the positive effects,” the company added.