New single-family home sales posted a surprise increase in October, rising 7.5% month over month to an annual rate of 632,000, while the median price of a new home sold during the month rose to an all-time high, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported.    

Year over year, the pace of newly built home sales in October was down 5.8% from the year-ago rate of 671,000.    

The median sales price of a new house sold last month surged to $493,000, compared to $455,700 in September and $427,300 a year ago.    

The inventory of new homes for sale in October fell to 8.9 months from 9.4 months in September and 6.9 months in October 2021.    

“The October report surprised to the upside, but leading indicators — permits and builder confidence — indicate ongoing weakness,” First American Deputy Chief Economist Odeta Kushi said. “There is a large number of started but not-yet-completed homes in the pipeline, so prices will need to adjust to make new homes attractive enough to entice more buyers.” 

By region, the pace of new-construction homes sold was mixed, with gains of 45.7% and 16% in the Northeast and South, respectively, and declines of 34.2% and 0.8% in the Midwest and West, respectively.