Sales of new homes in the US bounced unexpectedly in November despite high mortgage rates, official data showed Friday, with low inventories of existing homes likely nudging buyers into the market for new properties.
The real estate sector, which is sensitive to interest rates, has been reeling as the central bank raised the benchmark lending rate multiple times this year to cool demand and rein in soaring inflation.
But sales of new single-family houses jumped 5.8 percent to an annual rate of 640,000 in November, seasonally adjusted, said the Commerce Department.
This was higher than the revised rate of 605,000 in October, and defied analyst expectations of a decline.
But compared with November 2021, the rate was down 15.3 percent, the report said.
Monthly data can be volatile, and economists have cited a lack of existing inventory as a reason that buyers are turning to new properties.
But the median sales price of new houses sold in November dropped to $471,200, from $484,700 in the month prior.
The market for new homes is smaller than that of existing homes in the United States, which has seen sales decline for a record 10 straight months.
Analysts do not expect the current trend to last, given that higher mortgage rates continue to batter affordability.
The popular 30-year fixed-rate mortgage averaged 6.3 percent as of mid-December, according to home loan finance company Freddie Mac, nearly double the figure a year ago.
“Existing home supply finally appears to be trending sharply upwards” as well, said Ian Shepherdson and Kieran Clancy of Pantheon Macroeconomics in a recent report.
“The mortgage applications numbers suggest that new home sales will quickly drop… if existing home supply continues to rise,” the report said.
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