WASHINGTON (Reuters) - Sales of new U.S. single-family homes fell more than expected in November, but the housing market remains underpinned by historically low mortgage rates.
New home sales tumbled 11.0% to a seasonally adjusted annual rate of 841,000 units last month, the Commerce Department said on Wednesday. October's sales pace was revised down to 945,000 units from the previously reported 999,000 units.
Economists polled by Reuters had forecast new home sales, which account for about 11.2% of housing market sales, slipping 0.3% to a rate of 995,000 units in November. New home sales are drawn from a sample of houses selected from building permits and tend to be volatile month-to-month.
New home sales jumped 20.8% on a year-on-year basis. The government reported last week that single-family homebuilding, the largest share of the housing market, rose in November to the highest level since April 2007.
But persistent shortages of land, materials and skilled labor are raising construction costs for builders. A report on Tuesday showed sales of previously owned homes fell in November after five straight monthly increases.
The housing market, the economy's star performer, is being supported by pent-up demand and historically low mortgage rates. The COVID-19 pandemic has left 21.8% of the labor force working from home. That has led to a migration from city centers to suburbs and other low-density areas as Americans seek out spacious accommodation for home offices and schooling.
The coronavirus recession, which started in February, has disproportionately affected lower-wage earners.
The 30-year fixed mortgage rate is around an average of 2.67 percent, according to data from mortgage finance agency Freddie Mac (OTC:FMCC). That is the lowest rate since the agency started tracking the data in 1971.
In November, new home sales fell in all four regions.
The median new house price rose 2.2% to $335,300 in November from a year ago. There were 286,000 new homes on the market last month, up from 281,000 from October. At November's sales pace it would take 4.1 months to clear the supply of houses on the market, up from 3.6 months in October.