US new home sales cooled in September as mortgage rates surged

WASHINGTON: The sale of new US homes slowed in September, government data showed Tuesday, as surging mortgage rates weighed on homebuyers and affordability worries bite.

New home sales were down by 0.6 per cent from August, reaching a seasonally-adjusted annual rate of 676,000 last month, said the Commerce Department.

While the figure beat expectations of 653,000 according to a forecast published by MarketWatch, it was still 5.3 per cent below the rate seen the same month a year ago.

The cooldown comes as US mortgage rates exceeded 7.0 per cent last month, reaching their highest level since President Donald Trump returned to the White House.

The popular 30-year fixed-rate mortgage averaged 7.03 per cent in late September, Freddie Mac data showed, underscoring voters' affordability concerns as US midterm elections approach next month.

Cost of living worries and climbing mortgage rates have been bogging down property sales this year, with American households facing increased pressure from soaring gasoline costs.

The median sales price of new homes sold in September rose 3.9 per cent month-on-month to US$400,400.