New-Home Sales Drop in October to Much Lower Level Than Expected

Key details: The median sales price of new houses sold in October dropped to $409,300, down from $422,300 in the prior month and down 17.6% from the same month last year.

The supply of new homes for sale rose by 1.4% between September and October, equating to a 7.8-month supply. That’s up from a 7.2-month supply in the prior month.

Big picture: New-home sales have been volatile but generally trending higher since last summer. Economists are starting to talk about a possible inflection point but are cautious about reading too much into the data, because October was when the average rate for a 30-year fixed mortgage rose to almost 8% before falling sharply in recent weeks.

Market reaction: Stocks were set to open lower on Monday, while the 10-year Treasury yield was down slightly to 4.43% in early morning trading.