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Home Sales Dip as High Rates Bite but Trend still Strong

Sales of new single-family homes fell 5.6% in October to an annualized pace of 679,000, as reported by the US Census Bureau. The median sales price decreased by 17% from the previous year, dropping to $409,300, yet remains significantly higher than pre-pandemic levels.

Our take:  High borrowing costs have taken a toll on both sales and prices. Nevertheless, new home sales have risen over the past year, and prices are merely readjusting to pre-pandemic levels. The impact of inflation is minimal in this context, as home prices diverge from the Owners' Equivalent Rent (OER), which continues to hover around 7%.


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