New home sales jumped last month despite consistently high mortgage rates that experts say have hampered affordability and pushed potential buyers out of the market.
Sales of new single-family homes rose by 7.5 percent in October at a seasonally adjusted annual rate of 632,000, according to Census Bureau data released on Wednesday.
But the new sales fell behind the October 2021 estimate by 5.8 percent.
The median sales price of new single-family homes sold in October was $493,000, while the average sales price was $544,000.
New sales numbers follow separate data released last week that shows existing home sales declining for the ninth straight month.
Existing home sales in October declined by 5.9 percent from September and by more than 28 percent from a year earlier, according to data from the National Association of Realtors.
The housing market has cooled in recent months due partly to aggressive interest rate hikes from the Federal Reserve. These rate increases have sent mortgage rates soaring and pushed monthly payments out of reach for many Americans.
Yet there are signs buyers could feel some mild relief due to falling mortgage rates over the last two weeks.
Mortgage rates experienced their largest weekly drop in nearly 40 years last week, with the 30-year fixed rate falling to 6.61 percent. And rates fell again this week to 5.58 percent, according to Freddie Mac data released on Wednesday.
However, the fluctuating rates could put pressure on buyers who may be unsure when to enter or exit the market.
“Mortgage rates continued to tick down heading into the Thanksgiving holiday,” Sam Khater, Freddie Mac’s chief economist, said in a media release.
“In recent weeks, rates have hit above seven percent only to drop by almost half a percentage point. This volatility is making it difficult for potential homebuyers to know when to get into the market, and that is reflected in the latest data which shows existing home sales slowing across all price points.”