U.S. new home sales post surprise fall in October, hints at temporary housing market setback

New home sales in the United States unexpectedly fell during the month of October, hinting at a temporary setback in the world’s largest economy, amid an environment of recovering labor market.

US new home sales fell 1.9 percent in October to an annualized rate of 563,000 from a revised figure of 574,000 for September, which was originally reported as 593,000, data released by the Ministry of Commerce showed Thursday.

Further, the data was also weaker than the expected figure of 590,000, although there was still an annual increase of 17.8 percent. There was a monthly increase in sales for the West, while sales fell slightly in the other regions. In annual terms, annual growth was led by 28.7 percent in the West, while there was a 6.3 percent decline in the North East.

In addition, a separate report on Tuesday showed that the number of previously-owned houses, rose to a whopping 9-1/2 year high during the period of October, driven by a buoyant labor market and rising wages that led to a rise in borrowing costs as well.

According to data released by Freddie Mac, the mortgage financing company, interest on mortgage-backed loans jumped 40 basis points to near 4 percent, in the run up to the country’s presidential election and the victory of Republican candidate Donald Trump against Democrat opponent Hillary Clinton.

Also, median sales price rose to USD304,500 from USD314,100 with prices recording a small annual decline, while the average price also declined by over 3.0 percent on the year.

The US dollar index traded firmer 0.04 percent at 101.75, while at 5:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at 31.92 (lower than the +75 benchmark for bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

Meanwhile, the benchmark 10-year bond yields  rose nearly 5 basis points to 2.35 percent, highest in 11 months.