By NAHB
Steadily rising mortgage rates coupled with ongoing affordability challenges kept many potential home buyers on the sidelines in October.
Sales of newly built, single-family homes in October declined 17.3% to a 610,000 seasonally adjusted annual rate, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in October is down 9.4% compared to a year earlier. October new home sales are up 2.1% on a year-to-date basis.
“The decline in new home sales highlights the pressures on prospective buyers who are navigating tighter budgets and higher borrowing costs,” said Carl Harris, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Wichita, Kan. “The drop also reflects a slowdown in buyer activity amid broader economic uncertainty.”
“Higher mortgage rates, up 60 basis points in October per Freddie Mac, and elevated home prices continued to worsen affordability challenges,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “Despite these headwinds, which also include increased material costs for builders, new construction remains a vital part of the market, especially in areas with low existing home inventory.”
