New home sales slipped 0.7% in October but remain solid

Sales of new homes dipped slightly in October compared with September but remain well above levels of a year ago, with lower mortgage rates helping spur a rebound in purchases.

The Commerce Department says sales of single-family homes slipped 0.7% last month to a seasonally adjusted annual rate of 733,000. But that decline followed robust gains of 4.5% in September and 7% in August.

Sales of both new and existing homes have been on an upswing since summer, lifted by lower borrowing rates. Residential construction added to overall economic growth in the third quarter after a long period of declines. Most economists expect this strength to continue.

In October, sales were up in the Midwest and West but fell in the Northeast and South.