The new home market helps keep the overall housing market balanced. When demand is high, builders build more homes. That adds to the supply of available homes and helps keep home prices from spiking – which means, whether you're considering buying a new house or not, the new home market impacts your home search. So is it bad news that the latest numbers from the U.S. Census Bureau and the Department of Housing and Urban Development show new home sales down 17.3 percent in October?
Well, it may not be as bad as it seems. First off, mortgage rates increased in October, after falling throughout August and September. That likely had a discouraging effect on buyers. The other factor was weather. Two major hurricanes led to a sharp drop in sales in the South, where the new home market has been most active. In short, between extreme weather events and rising rates, October's new home sales numbers aren't likely the result of a downward trend. More than likely, they're the result of a unique set of conditions and regional factors.
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