Purchases of newly built single-family homes—a relatively narrow slice of all U.S. home sales—fell 8.9% to a seasonally adjusted annual rate of 544,000 in October, the Commerce Department said Wednesday. Economists surveyed by The Wall Street Journal had expected a 4.0% increase or 575,000 new home sales.
The 8.9% decline was the steepest since December last year. September’s new homessales figure was revised higher, to 597,000 after 591,000 new homes were sold in August.
All U.S. regions experienced new-home sales declines last month, with sales in the Northeast dropping 18.5% on the month.
From a year earlier, U.S. sales in October were down 12%. The months supply of homes on the market rose to 7.4 in October, the largest supply figure since February 2011.
In the broader housing market, a shortage of available homes has fed a rapid run-up in home prices, creating an affordability crunch. While price growth has slowed some, it appears in part to reflect weakening demand, as inventory has built up in recent months.
At the same time, skilled construction labor shortages and rising input costs are also making home buying more expensive.
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