The U.S. Commerce Department reported Tuesday that sales of newly built homes fell 17.3% year-over-year to 610,000 in October (from a revised 738,000 in the previous month), a quarterly adjustment that put the pace of sales at its lowest since November 2022, and below Wall Street's expectations (economists had expected a drop to 725,000 units).

Key Data

The average price of a new home rose to $437,300 in October, and the monthly supply of new homes for sale increased by 23.4% from September to October; sales in the South fell by 27.7%, dragging down the nation, with the Northeast increasing by 53.3% but accounting for a smaller share of the increase (46,000 sales in the Northeast and 339,000 sales in the South in October), and the nation declining by 9.4% over the previous year.

Overall, new home sales declined due to hurricanes affecting demand for homes in the South, but the downturn may be short-lived. Compared with the second-hand homes, new home sales more active, builders can provide more inventory and incentives, and confidence in home sales with the new administration to enhance, builder confidence index hit a seven-month high.

Economist's view

Kai investment macro Bradley Saunders said, considering the hurricane damage and rising lending rates, October sales fell in anticipation, although the next month or rebound, but the high cost of borrowing, the end of the year sales or stabilized at 700,000 units of the annualized level; Santander Stephen Stanley expects “a sharp rebound in November,” said unconvinced by the October data.