WASHINGTON – U.S. new home sales (search) unexpectedly rose 0.2 percent in October to the third-highest level on record following an upwardly revised gain in September, a government report showed on Wednesday.
Sales of new single-family homes increased to a seasonally adjusted annual rate of 1.226 million units, the highest level since May, from an upwardly revised 1.224 million rate in September, the Commerce Department said.
Analysts polled by Reuters had expected a 1.20 million pace in October, down 0.5 percent from the initial estimate of 1.206 million in September.
Homes available for sale at the end of the month rose 1 percent to 412,000, the report said. The supply of homes available for sale at the current sales pace, which many analysts consider a more reliable measure of inventories, was 4.1 months' worth.
The median sales price of new homes sold in October was $221,800, up from $203,300 in September. The average price was $286,700, up from $262,600.
New applications for U.S. home loans fell last week even as average 30-year mortgage rates decreased, the Mortgage Bankers Association (search) said earlier on Wednesday.
The trade association said its seasonally adjusted index of mortgage activity fell 5.7 percent to 715.0 in the week ended Nov. 19, more than offsetting a 4.3 percent gain the prior week.
Fixed 30-year mortgage rates averaged 5.64 percent last week, excluding fees, down from 5.70 percent the prior week.
Mortgage interest rates have drifted lower in recent months, despite a series of interest rate hikes by the Federal Reserve (search), reflecting investor confidence the Fed's move will keep inflation in check.