New home sales data for October shows a decrease of 5.6% month-over-month to a seasonally adjusted annual rate of 679,000 units from a downwardly revised 719,000 in September. On a year-over-year basis, new home sales were up 17.7%.
The median sales price also declined to 17.6% year-over-over. October marked the seventh straight month of year-over-year decline in the median home selling price.
The decline in sales reported by the Commerce Department on Monday was in line with a recent deterioration in homebuilder sentiment, which came as the rate on the popular 30-year fixed-mortgage approached 8%, leaving builders anticipating weaker sales. Mortgage rates have since retreated from two-decade highs and are at levels last seen in late September.
The key takeaway from the report is that new home sales activity slumped noticeably in October despite a big drop in median and average selling prices. The latter had to do with high mortgage rates and generally high prices combined to create affordability pressures for prospective buyers.
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