U.S. New Home Sales Fall Short as High Mortgage Rates Deter Buyers

Despite a drop in prices, housing affordability remains low as mortgage rates reach a 20-year high.

New home sales in the U.S. fell short of expectations in October, with a seasonally adjusted annual rate of 679,000, compared to a predicted 725,000.
Mortgage rates hovered near 8 percent in October, the highest level in more than 20 years, due to a series of interest rate hikes by the Federal Reserve.
The median sales price for a new house was $409,300, a 17.6% drop from a year ago, likely reflecting incentives offered by builders to attract buyers.
Despite the drop in prices, the high mortgage rates have contributed to lower affordability of housing, with both homeownership and rental affordability indices at their lowest levels in decades.
Existing home sales also dropped in September to their lowest pace since 2010, with homeowners reluctant to sell due to their lower mortgage rates.