United States: New home sales fell 10.9% in September

WASHINGTON (Reuters) – Sales of new homes in the United States fell in September and the figure for the previous month was revised downwards, in the latest signs that high mortgage rates are weighing on the housing market.

Sales fell 10.9% to 603,000 seasonally adjusted annualized data, the Commerce Department said Wednesday. The August figure was revised down to 677,000 units, against 685,000 initially announced.

Economists polled by Reuters on average had expected a bigger fall in September, of 13.9%, to 585,000.

Sales fell 20.2% in the southern United States and 0.7% in the West. But they rose 4.3% in the Midwest and jumped 56.0% in the Northeast.

Year on year, new home sales, which account for about 10% of US home sales, are down 17.6%.

S&P CoreLogic Case-Shiller monthly survey results released on Tuesday showed house prices fell 0.9% month on month in August, their second straight monthly decline.

Sales of existing homes fell for an eighth consecutive month in September while home construction fell, data showed last week.

The housing market was hardest hit by the Federal Reserve’s rapid hike in interest rates, aimed at curbing inflation.

The central bank raised the federal funds rate target to 3.00-3.25%, its highest level since 2008.

Mortgage rates rose even faster. According to data from mortgage finance agency Freddie Mac, the 30-year fixed mortgage rate averaged 6.94% in the past week, its highest level in 20 years, after 6.92% the previous week.

(Report Lucia Mutikani, French version Laetitia Volga, edited by Tangi Salaün)

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