U.S. new home sales in October showed a larger decline than the market expected, according to Bloomberg. Census Bureau data showed a 5.6% drop from September, with annualized sales averaging 679,000 homes, while inventory stood at its highest level since January. Used home sales also declined in October, marking their largest drop since January and reaching their lowest level since 2010.

The main reason for the decline is in the mortgage rate, which reached nearly 8% in October, the highest in many years, although it began in November on the perception that the Federal Reserve's rate hike cycle has come to an end, according to Bloomberg.

The median price of a new home in the U.S. has fallen 17% from a year ago to US$403,900. This drop reflects the increasing difficulty Americans are facing in buying homes. Despite the drop, prices remain above pre-pandemic market levels.

If the Fed's benchmark rate hike cycle has indeed come to an end and the mortgage rate continues the decline it showed in November, as the market believes, a light will begin to be seen in the home sales tunnel, although rising prices have left many Americans far from the dream of homeownership.