US new home sales rise but hold near year's lowest levels
WASHINGTON (REUTERS) - Sales of new single-family homes in America rose last month but held near their lowest levels this year, a sign that a sharp rise in interest rates is weighing on the United States economy.
Sales rose 7.9 per cent to an annual rate of 421,000 units, the Commerce Department said on Wednesday. The pace of sales was in line with analysts' expectations and supported the view that rising mortgage rates were taking steam out of America's housing recovery.
Last month's increase in new home sales did not make up for the steep drop registered in July, when the pace of sales was the weakest since October. Mortgage rates surged beginning in May, when the Federal Reserve gave signals it was thinking of winding down a bond-buying stimulus programme.
The Fed surprised financial markets last week when it said it would put off reducing monthly bond purchases for now. Policymakers said rising borrowing costs played a role in their decision.