Sales of new homes soared at a record pace in October in what could be a last hurrah for the booming housing market.
The Commerce Department said that sales of new single-family homes shot up by 13 percent last month, the biggest one-month gain in more than 12 years. The increase pushed sales to an all-time high seasonally adjusted annual rate of 1.42 million units.
The increase confounded analysts who had been predicting that new home sales would decline by 1.8 percent, reflecting continued increases in mortgage rates. It was possible that the unexpected surge reflected a final rush by buyers to get into the market before mortgage rates climb higher.
The rise in new home sales was accompanied by an increase in prices, with the median price increasing by 1.6 percent from September to $231,300 in October.
Sales were up in most regions of the country, led by a 46.9 percent surge in the West and a 43.3 percent jump in the Northeast. Sales also rose by 1.9 percent in the South but were down 9.5 percent in the Midwest.
The nationwide jump in new home sales was the one bright spot for housing last month. Sales of previously owned homes fell by 2.7 percent, the National Association of Realtors reported on Monday, and construction of new homes and apartments also fell during the month.
Analysts believe the nation’s booming housing market is beginning to show signs of slowing under the impact of rising mortgage rates, which are going up as the Federal Reserve continues a campaign to boost interest rates to make sure inflation does not get out of control.
David Lereah, the Realtors’ chief economist, said he was looking for sales of existing homes to drop next year and for prices, which had been rising at double-digit rates, to moderate to a gain of around 5 percent.
The concern of some economists is that the booming housing market could have a bigger downturn, with sales and prices plummeting in the nation’s hottest markets.
The worry is that activity in recent years has been pumped up by investors buying homes and condominiums in hopes of quick gains. If they suddenly decide to dump those properties, it could cause a glut on the market that would further depress prices.