Sales of new single-family homes in the U.S. fell sharply in October 2024, reaching their lowest level in nearly two years as rising mortgage rates and hurricane disruptions curbed buyer activity. According to the Commerce Department, new home sales plunged 17.3% to a seasonally adjusted annual rate of 610,000 units, marking the lowest rate since December 2022. The sales pace for September remained unchanged at 738,000 units. Economists had anticipated a smaller decline, predicting a rate of 725,000 units. New home sales, which account for roughly 15% of U.S. home sales, also fell 9.4% year-over-year in October. Mortgage rates played a significant role in the decline. After the Federal Reserve began cutting interest rates, the average 30-year fixed-rate mortgage dropped to 6.08% at the end of September. However, by the end of October, rates surged to 6.72%, driven by rising 10-year Treasury yields amid robust economic data and concerns over inflation. The 30-year fixed-rate mortgage averaged 6.84% last week. Regionally, new home sales plummeted 27.7% in the South, likely due to hurricane-related disruptions, and fell 9.0% in the West. In contrast, sales rose 1.4% in the Midwest and surged 53.3% in the Northeast. The median price of new homes increased 4.7% year-over-year to $437,300 in October. Inventory levels also rose, reaching 481,000 units, the highest since early 2008. At October’s sales pace, it would take 9.5 months to clear the current supply of homes, compared to 7.7 months in September. Expectations of slower rate cuts next year have intensified following inflation concerns. Additionally, President-elect Donald Trump's announcement of tariffs on imports from Mexico, Canada, and China has fuelled uncertainty in the housing market. (ET)