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New home sales slipped 0.7% in October but remain solid

A sign stand in front of a newly built house in Westwood, Massachusetts, on Sept. 3. The U.S. Commerce Department reported on Tuesday that sales of new houses decreased slightly in October. (AP Photo/Steven Senne, File)

A sign stand in front of a newly built house in Westwood, Massachusetts, on Sept. 3. The U.S. Commerce Department reported on Tuesday that sales of new houses decreased slightly in October. (AP Photo/Steven Senne, File)

By MARTIN CRUTSINGER
AP Economics Writer

WASHINGTON (AP) — Sales of new homes dipped slightly in October from what they had been in September but remained well above the figure for a year ago as lower mortgage rates helped spur purchases.

The annual rate of single-family new-home sales slipped 0.7% last month to a seasonally adjusted figure of 733,000, the Commerce Department said Tuesday. But that decline followed gains of 4.5% in September and 7% in August.

The sales numbers for both new and existing homes have been on an upswing since the summer, lifted by lower borrowing rates. Residential construction added to overall economic growth in the July-September quarter after a long period of declines. Most economists expect this strength to continue.

In October, sales of new homes became increasingly common in the Midwest and West but less so in the Northeast and South.

The Northeast suffered the biggest drop-off in sales last month — a decline of 18.2%. The number of purchases were down 3.3% in the South. They rose 7.1% in the West and 4.2% in the Midwest.

All told, the number of new home sales in October were up a hefty 31.6% from what they were a year ago. Sales have been fueled in part by falling mortgage rates, which have been trending lower since the Federal Reserve switched from raising its benchmark rate four times last year to cutting rates three times this year.

The median price of a new home sold in October was $316.700, 3.7% higher than a year ago.

The National Association of Realtors reported last week that sales in the much bigger market for existing homes rose 1.9% in October to a seasonally adjusted 5.46 million. That level was 4.6% higher than a year ago.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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