Steadily rising mortgage rates and affordability challenges have contributed to a decline in new home sales for October, as many potential buyers remain hesitant. According to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built single-family homes fell by 17.3% to a seasonally adjusted annual rate of 610,000 units. This marks a 9.4% decrease compared to the same period last year, although there is a slight increase of 2.1% on a year-to-date basis.

Carl Harris, chairman of the National Association of Home Builders (NAHB) and custom home builder from Wichita, Kansas, stated: “The decline in new home sales highlights the pressures on prospective buyers who are navigating tighter budgets and higher borrowing costs.” He also noted that "the drop also reflects a slowdown in buyer activity amid broader economic uncertainty."

Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis, added: “Higher mortgage rates, up 60 basis points in October per Freddie Mac, and elevated home prices continued to worsen affordability challenges.” She emphasized that despite these obstacles—including increased material costs for builders—new construction remains essential in areas with low existing home inventory.

The report indicates that new single-family home inventory in October stood at 481,000 units—a rise of 8.8% from the previous year—representing a 9.5 months' supply at the current building pace. Completed inventory ready for occupancy increased by 52.6% to 116,000 units but still constitutes only 24% of total inventory.

The median price for new homes rose by 2.5% in October to $437,300 and has seen an overall increase of 4.7% over the past year.

Regionally, new home sales saw varied changes; they rose by 35.3% in the Northeast and by 15.9% in the Midwest while declining by 19.7% in the South and experiencing a slight dip of 1.3% in the West.