Washington Sales of new homes moderated in October after surging the month before, further evidence that economic growth is slowing to a more sustainable pace.
Americans purchased new single-family homes at a seasonally adjusted annual rate of 928,000 in October, a 2.6 percent drop from September, the Commerce Department said Monday. Some analysts expected a fall of 4.9 percent.
Even with the decline, new-home prices reached record levels in October, a sign of the healthy housing market.
New-home sales soared by 11.9 percent in September, the biggest jump since September 1993. That pushed September's sales level to 953,000, the highest since November 1998.
The Federal Reserve has boosted short-term interest rates six times since June 1999 to slow the economy's growth enough to keep inflation in check, but not so much that it triggers a recession.
The Fed's rate increases are designed to raise borrowing costs and dampen demand for big-ticket items such as homes and cars. Many call this an attempt to reach a "soft landing" for the high-flying economy.
The average rate on a fixed-rate 30-year mortgage was 7.8 percent in October, down slightly from the average 7.9 percent rates posted in September and in October 1999.
With mortgage rates holding steady below the 8 percent mark, home builders say they feel good about future sales. Last week, the government reported that construction spending nationwide jumped 0.9 percent in October, its second highest level on record.