US new home sales hit their highest level in nearly a year and a half in September

WASHINGTON (Reuters) – U.S. sales of new single-family homes rose to their highest level in nearly a year and a half in September as buyers rushed to take advantage of falling mortgage rates.

New home sales rose 4.1% last month to a seasonally adjusted annual rate of 738,000 units, the highest level since May 2023, the Commerce Department said Thursday.

August’s sales pace slowed to 709,000 units from the previously reported 716,000 units.

Economists consulted through Reuters New home sales account for more than 15% of US home sales, forecast to rise to a rate of 720,000 units.

New home sales are calculated at the time a contract is signed. They advanced 6.3% in September on a year-over-year basis.

Mortgage rates fell in September, ending the month at their lowest level in more than a year and a half, as the Federal Reserve began to cut interest rates.

However, they have risen over the past three weeks as solid economic data such as retail sales and annual national accounts surveys forced investors to expect another 50 basis point interest rate cut by the US Federal Reserve next month.