WASHINGTON (Reuters) – Sales of new single-family homes in the United States fell more than expected in August as the 30-year fixed mortgage rate rose above 7%, penalizing potential buyers.
New home sales fell 8.7% to a seasonally adjusted 675,000 units last month, the Commerce Department said Tuesday. July sales were revised upwards to 739,000 units, compared to 714,000 previously.
Economists polled by Reuters had forecast sales of new homes, which represent a small portion of home sales in the United States, at 700,000 units.
In August, sales increased 5.8% year-on-year.
The rate on the popular 30-year fixed mortgage topped 7% in August and climbed to an average of 7.19% last week, its highest level since July 2001, according to data from finance agency Freddie Mac.
Mortgage rates are rising along with yields on U.S. Treasuries, which have soared on concerns that soaring oil prices will hamper the Fed’s fight against inflation.
(Report by Lucia Mutikani; French version by Kate Entringer)
Copyright © 2023 Thomson Reuters