New-home sales remain elevated in October at 999,000 pace

New-home sales in the U.S. held up in October, remaining near the best pace since 2006 and well above pre-pandemic levels, the latest sign that record-low mortgage rates are underpinning robust buyer interest.

Purchases of new single-family houses dropped 0.3% from September to a 999,000 annualized pace from an upwardly revised 1.002 million rate, government data showed Wednesday. The median forecast in a Bloomberg survey of economists called for a 975,000 rate. The median selling price rose 2.5% from a year earlier to $330,600.

Recent momentum in housing has been driven by attractive mortgage rates and buyers looking for more space as they work from home. Purchases, however, may face greater headwinds after infections began to soar around the U.S. in recent weeks and new restrictions threatened to curb hiring.

The number of properties sold for which construction hadn’t yet started increased to a fresh 14-year high of 385,000 in October, suggesting that strength in construction will continue in coming months.

The supply of new homes remained the tightest on record. At the current sales pace, it would take 3.3 months to exhaust the supply, the same as the prior month and the leanest inventory in data going back more than a half century.

The number of homes for sale was unchanged at 278,000, the fewest since 2017.