US new home sales rebound in November after hurricane drag

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WASHINGTON (Reuters) – Sales of new U.S. single-family homes rebounded in November after being depressed by hurricanes in the prior month, but rising mortgage rates could hamper sales next year.

New home sales jumped 5.9% to a seasonally adjusted annual rate of 664,000 units last month, the Commerce Department’s Census Bureau said on Monday. The sales pace for October was revised higher to a rate of 627,000 units from the previously reported 610,000 units.

Economists polled by Reuters had forecast that new home sales, which account for about 15% of U.S. home sales, would rebound to a rate of 660,000 units. New home sales are counted at the signing of a contract, and can be volatile on a month-to-month basis. They increased 8.7% year on year in November.

The average rate on the popular 30-year fixed-rate mortgage rose to 6.72% last week after falling to 6.60% in the prior week, data from mortgage finance agency Freddie Mac showed.

The Federal Reserve last week cut its benchmark overnight interest rate by 25 basis points to the 4.25%-4.50% range, but projected only two rate reductions in 2025, citing the economy’s continued resilience and still-elevated inflation.

In September, the Fed had penciled in four quarter-point rate cuts in 2025. The shallower rate cut path next year in the latest projections also reflected uncertainty over policies from President-elect Donald Trump’s incoming administration, including tariffs on imported goods, tax cuts and mass deportations of undocumented immigrants, which economists have warned would be inflationary.

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The yield on the U.S. 10-year Treasury note touched a fresh 6-1/2-month high last week. Mortgage rates track the 10-year Treasury note.

(Reporting by Lucia Mutikani; Editing by Mark Porter)

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