The sharp 25.4% m/m increase in new home sales in October reversed the decline during the previous three months and left new home sales back at their level before mortgage interest rates rose. That's an encouraging sign that the hit from higher mortgage rates may have been temporary. But the acid test will come in a few months, when we'll be looking to the less timely existing home sales figures to turn up. Meanwhile, there has been a slight reacceleration in house prices in recent months. But with supply rising and price expectations moderating, price gains will soften again next year.
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