Sales of new homes across the U.S. spiked last month, as buyers rushed to sign contracts amid rising interest rates.
Purchases of newly constructed single-family homes increased 5.2 percent between October and November to a four-month high of a 592,000 annualized pace, U.S. Commerce Department data cited by Bloomberg showed Friday. The increase included the largest gain in the Midwest market since October 2012 and the fastest pace of demand on the West Coast in almost nine years, according to the publication.
The median sales price of a new house fell 3.7 percent to $305,400 year-over-year. There were 250,000 new houses on the market at the end of November, the highest number since September 2009.
However, the data on new-home sales can be imprecise, the Wall Street Journal noted. The 5.2 percent sales increase came with a margin of error of 14.1 percentage points, the paper reported.
Last week, the Federal Reserve increased its benchmark lending rate for the first time in 2016. It also indicated it will raise short-term interest in 2017. As a result, U.S mortgage rates reached a two-year high Thursday, according to Freddie Mac.
The increase in mortgage rates could dampen home buying activity in 2018, according to the Journal. [Bloomberg] and [WSJ] — Miriam Hall