Sales of new U.S. single-family homes surged in October, the government reported Wednesday, indicating the housing-market recovery remains intact despite higher mortgage rates. The Commerce Department said sales of new homes jumped 25.4 percent to an annual rate of 444,000 units after falling 6.6 percent the previous month. Compared to a year ago, sales were up 21.6 percent. The release of both the October and September reports was delayed because of the U.S. government shutdown in October. The strong gain in new-home sales suggested that higher mortgage rates had not derailed the market recovery. While higher rates have slowed the pace of home sales, demand for housing continues to recover from multi-decade lows. Increased housing demand was reflected by a 3.7 percent drop in October's inventory of new homes for sale. At the October sales pace, it would take 4.9 months to clear the houses on market, down from 6.4 months in September. A supply of 6 months is normally considered a healthy balance between supply and demand.
