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U.S. new home sales drop to more than 2-1/2-year low

In the United States, the sales of new homes for single family have decreased to a lowest point since two and a half years in the month of October.

This happened amid the acute declines in the four regions which accounts to further proof that the high mortgage rates were hurting the market of housing in the United States.

On Wednesday, the Commerce Department of the United States stated that there was a drop of 8.9 percent in the sales of new homes which had a seasonally adjusted annual rate for the last month of 544,000 units.

According to the Department since the march of 2016, that was the lowest level attained and the percentage drop was the biggest since the December of 2017.

Source: oanda

The pace of sales for the month of September was revised to become higher at 597,000 units which according to the previous reports was 553,000 units.

In the last six months, four months have witnessed a decline in the sales of the new homes.

According to the Reuters, the economists polled by it forecasted that in October there will be a 3.7 percent rise in the sales leading to a pace of 575,000 units.

The sales of new homes account for about 9.4 percent of the market of housing sales.

Source: jtlandscaping

The sales of new homes are drawn from permits and have a tendency to be volatile on a monthly basis. Last year this market witnessed a decrease of 12 percent.

However, data of the last week showed that there was a very moderate increase in the sales of previously owned houses as well as house building in the month of October.

The reason for decline in the rate of sales of new houses is stated to be the increase in the mortgage rates.

Source: Reuters, TodayOnline

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Written by Ketakee Srivastava

I am an amateur content writer, who is currently pursuing a Masters in Finance from ICFAI Business School. In this highly volatile Business Market, I find no better way to keep myself updated than to write about it and reflect my own thoughts as words.

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