WASHINGTON (AP) -- The Commerce Department reports on the number of new homes sold in October. The report will be released at 10 a.m. Eastern Wednesday.
SLIGHT GAIN EXPECTED: Economists predict that sales rose to a seasonally adjusted annual rate of 435,000, according to a survey by FactSet. That would be up from a pace of 421,000 in August. The report will also include figures for September. (The October and September reports were delayed by the government shutdown in October.)
SLOWING MOMENTUM: In August, the sales pace for newly built homes had increased nearly 13 percent since the same month in 2012. The improvement drove more economic growth and hiring at construction firms, as the housing market was finally rebounding from the crisis.
Still, the annual pace was well below the 700,000 that is consistent with healthier markets. And the gains from earlier in the year may be leveling off.
Higher borrowing costs, steep price increases and limited inventories have slowed sales of existing homes this fall. The same trend could surface in the latest new-home sales figures for October and September.
Mortgage rates are nearly a full percentage point higher than the spring. Rates rose in May when the Federal Reserve first signaled that it might slow its $85 billion in monthly bond purchases. But rates have moderated from recent highs after the Fed decided to keep its bond buying intact.
The latest average rate on a 30-year fixed mortgage was 4.29 percent, which is still close to historic lows.
The number of new homes available for sale was 175,000 in August. That's still relatively lean — at the August sales' pace it would take five months to exhaust the supply.
The median price of a new home sold in August was $254,600.
There are signs that builders are preparing for less growth. Approved permits to build single-family houses began to flat line in the spring, while spending on home construction spending fell 0.5 percent in October from September.
Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to National Association of Home Builders.
WATCHOUT FOR THE WEST: New-home sales have actually been plunging in Western states, down 43.4 percent since January. That drop-off has been offset by gains in the Northeast, Midwest and South.
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