According to the Commerce Department, new home sales declined 2.1% in November at an adjusted annual rate of 464,000, compared to an upwardly revised figure of 474,000 in October. Despite the drop in home sales, last month’s figure exceeded economists’ estimates of 440,000.
Commerce also revised August and September’s numbers upward because more prospective homebuyers are becoming used to the rising interest rates, and that these rates are still near record lows. Since the Federal Reserve cut back its monthly bond purchases from $75 billion to $10 billion in May, the 30-year mortgage rate shot up from 3.51% to 4.47%.
The fast pace of new-home sales adjusted inventories to 167,000, or a 4.3-month supply, dwindling from 4.5 months in October and 5.4 months in September, with the median sales price of homes jumping to $270,900 this month from $259,200 in October. The shrinking inventory has pushed up home prices even further, leading to lack of affordability in the housing market.