US new home sales rebound in November after hurricane drag
11:38 am Monday, December 23rd, 2024
WASHINGTON (Reuters) – Sales of new U.S. single-family homes rebounded in November after being depressed by hurricanes in the prior month, but rising mortgage rates could hamper sales next year.
New home sales jumped 5.9% to a seasonally adjusted annual rate of 664,000 units last month, the Commerce Department’s Census Bureau said on Monday. The sales pace for October was revised higher to a rate of 627,000 units from the previously reported 610,000 units.
Economists polled by Reuters had forecast that new home sales, which account for about 15% of U.S. home sales, would rebound to a rate of 660,000 units. New home sales are counted at the signing of a contract, and can be volatile on a month-to-month basis. They increased 8.7% year on year in November.
The average rate on the popular 30-year fixed-rate mortgage rose to 6.72% last week after falling to 6.60% in the prior week, data from mortgage finance agency Freddie Mac showed.
The Federal Reserve last week cut its benchmark overnight interest rate by 25 basis points to the 4.25%-4.50% range, but projected only two rate reductions in 2025, citing the economy’s continued resilience and still-elevated inflation.
In September, the Fed had penciled in four quarter-point rate cuts in 2025. The shallower rate cut path next year in the latest projections also reflected uncertainty over policies from President-elect Donald Trump’s incoming administration, including tariffs on imported goods, tax cuts and mass deportations of undocumented immigrants, which economists have warned would be inflationary.
The yield on the U.S. 10-year Treasury note touched a fresh 6-1/2-month high last week. Mortgage rates track the 10-year Treasury note.
(Reporting by Lucia Mutikani; Editing by Mark Porter)
