The Blubber

51% of Americans make a median annual salary of $75,000.

They can afford a home that costs about $256,000, per the National Association of Realtors.

The median home price in the United States is $431,000, according to Federal Reserve Economic Data.

Median house price in October decreased 17.6% to $409,300 from year ago.

The Commerce Department reported a larger-than-expected decline in sales of new single-family homes in the United States for October. Higher mortgage rates squeezed out potential buyers, even as builders lowered prices. However, this setback is likely to be temporary due to the persistent shortage of previously owned houses on the market.

The reported decline in sales aligns with recent deterioration in homebuilder sentiment, influenced by the approaching 8% rate on the popular 30-year fixed mortgage. Builders anticipated slower buyer traffic as a result. Since then, mortgage rates have retreated from two-decade highs, currently at levels last seen in late September, potentially paving the way for a rebound in sales.

Daniel Vielhaber, an economist at Nationwide in Ohio, noted, "The market for new homes remains very solid by any historical standard and continues to be boosted by extremely low existing home inventory."

New home sales fell by 5.6% to a seasonally adjusted annual rate of 679,000 units in the latest month. September's sales pace was revised lower to 719,000 units from the previously reported 759,000 units. Economists polled by Reuters had anticipated a decline to a rate of 723,000 units.

New home sales, accounting for 15.2% of U.S. home sales, are considered a leading indicator of the housing market as they are counted at the signing of a contract. While they can be volatile on a month-to-month basis, sales increased by 17.7% year-on-year in October.

Sales showed a monthly rise in the Northeast and densely populated South but experienced a decline in the Midwest, the most affordable region, and the West, where housing is more expensive.

The supply of previously owned houses on the market is nearly 50% below its pre-pandemic level, contributing to increased demand for new construction. Home resales reported by the National Association of Realtors also plunged to over a 13-year low in October. Most homeowners with mortgage rates under 3% are reluctant to sell, further emphasizing the demand for new construction.

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