Purchases of new U.S. homes rebounded in October from a 14-month low and order backlogs reached an eight-year high, indicating a pickup in residential construction.
Sales jumped 10.7 percent, the most since August 2014, to a 495,000 annualized pace, Commerce Department data showed Wednesday. The number of homes sold but not yet started climbed to 177,000 in October, the highest level since July 2007.
Demand for new properties will probably keep growing as the job market improves and mortgage rates remain low. An improved outlook will help spur residential construction and contribute more to the economic expansion.
The median forecast of 73 economists surveyed by Bloomberg called for the pace to accelerate to 500,000. Estimates ranged from 460,000 to 550,000. The Commerce Department revised the September reading down to a 447,000 pace from a previously estimated 468,000.
The revisions suggest the October data should also be considered as preliminary. The report said there was 90 percent confidence the change in sales last month ranged from a 7 percent drop to a 28.4 percent increase.
The median sales price of a new house decreased 6 percent from October 2014 to $281,500, the report showed.
The increase in demand last month reflected an 8.9 percent gain in the South, which is the biggest region for home sales. In the smallest market, the Northeast, purchases rebounded a record 135.3 percent after slumping 46.9 percent a month earlier.
The supply of homes declined to 5.5 months from 6 months in September. There were 226,000 new houses on the market at the end of October.
New-home sales, which account for about 8 percent of the residential market, are tabulated when contracts are signed. That makes them a timelier barometer than transactions on existing homes.
Previously owned U.S. home purchases retreated in October from the second-highest level since 2007 as a lack of inventory limited the industry’s momentum, National Association of Realtors data showed Monday. Closings declined 3.4 percent to a
5.36 million annual rate. Prices increased in the 12 months through October as the number of dwellings on the market dropped.