The numbers: U.S. new home sales rose 7.5% to a seasonally-adjusted annual rate of 632,000 in October from a revised 588,000 in the prior month, the Commerce Department reported Wednesday.
Analysts polled by The Wall Street Journal had forecast new-home sales to fall to a seasonally-adjusted annual rate of 570,000.
The data are often volatile. Sales in September were initially reported at 603,000.
Key details: The median sales price of new houses sold in October jumped to a record $493,000, up from $455,700 in the prior month.
The supply of new homes for sale rose 1.5% between September and October, equating to a 8.9-month supply at the current sales pace. This is up from a 5.7-month supply in January.
Regionally, sales rose sharply in the Northeast and the South but dropped in the Midwest and the South.
Big picture: New home sales continue to buck the trend in many housing indicators. With the Federal Reserve continuing to raise interest rates, mortgage rates have hit 20-year highs and affordability has been declining. There could be some buyers rushing to complete purchases before homes get even more expensive. Other analysts point to a high cancellation rate for new home sales that is not reflected in the data.
Looking ahead: “The median and average new home price delivered was sharply higher in October, suggesting the high-end consumer has been able to withstand the increase in mortgage payments. Overall, while the rebound was encouraging, this report does little to change the outlook that housing will remain a drag on economic growth for several more quarters,” said economists at Contingent Macro.