A report from the US Department of Commerce showed that the number of new home sales in the United States fell to an annual pace of 368,000 in October, which was well below economists’ forecasts for a slight rise of 390,000.
Adding to disappointment was a revision downwards to the September sales figure from 389,000 to 369,000.
With the revisions, the upward trend in new home sales now appears to have slowed down and having seen very little volatility since February, hardly breaking above its May peak of 369,000 and hit a low of 143,000 in July.
One contributing factor which could account for some of the stagnation in sales, is a rise in home prices. However mortgage rates have been coming down, helping affordability. This should help limit a drop in sales.
Also weighing on newly constructed homes sales is near-record-low inventories as enough new homes are simply not available in some areas. In October, the number of new homes available rose 2,000 to 147,000.
Markets reacted negatively to the news, sending the safe haven dollar higher against risk currencies as risk appetite fell.