New Home sales dropped 8.9% in October in the US. Analysts at Wells Fargo explained new homes sales fell more than expected in October but sales for the prior three months were revised up, taking some of the sting out of this past month’s drop. They see demand for new homes weakening.
Key Quotes:
“New home sales plunged 8.9% in October, with sales falling in all four regions of the country. Even with the upward revisions to the prior three months, new home sales show persistent weakness. The slowdown is evident in nearly every key metric.”
“While higher mortgage rates have contributed to the slide, new sales began to weaken ahead of the rise in rates. The culprit is diminishing affordability, particularly among first-time buyers.”
“Inventories of new homes have also increased, with the months’ supply breaking out to 7.4 months and the number of new homes available for sale rising 18% over the past year. The spike has led to increased discounting, which is apparent in the price data.”
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