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New home sales surge in October

New home sales surge in October
New home sales dropped sharply in June. (Chris O'Meara / Associated Press)

New home sales shot up in October, evidence that buyers nationwide may be absorbing higher mortgage interest rates.

Sales of newly built single-family houses rose 25.4% from September to a seasonally adjusted annual rate of 444,000, the Commerce Department said Wednesday. The sharp rise comes after new home sales fell 6.6% in September.

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Compared with October 2012, sales are up 21.6%.

New homes in October sold for a median price of $245,800 nationally.

Sales rose in all regions. The West saw the smallest rise as buyers purchased 15.2% more new houses than a month earlier.

If houses continued to sell at their current rate, there would be a 4.9 months' supply of new homes on the market. Economists generally consider a supply of six months to be healthy.

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