Home sales dip 0.3% last month Consumer spending up 0.5%

Sales of new homes remained steady in October to a seasonally adjusted rate of 999,000 units.

While the Commerce Department said October new home sales were down 0.3% from September, the government revised up its September marginally. In all, the figures did not change much from the previous month, a sign that sales of new homes is remaining steady despite the homebuying season now entering the fall.

Sales of new homes are up 41.5% from the same period a year earlier, reflecting record low mortgage rates and a pandemic-induced push to the suburbs has made the housing market a bright spot despite the recession.

The median price of a new home sold was $330,600, the report said.

U.S. consumers increased their spending by a sluggish 0.5% last month, the weakest rise since April, when the pandemic first erupted, and a sign that Americans remain wary with the virus resurging across the country and threatening the economy.

The October gain reported Wednesday by the Commerce Department followed a seasonally adjusted 1.2% increase in September. It suggested that consumer spending, the primary driver of the U.S. economy, is being restrained by a weakened economy and by the failure of Congress to provide another stimulus package to struggling individuals and businesses.

The government’s report also showed that income, which provides the fuel for spending, fell 0.7% in October.

With new viral cases accelerating across the country, many states are adopting or considering new restrictions on businesses. Sales at restaurants and bars fell in October for the first time in six months. Restaurant traffic declined further in November, according to the reservations provider OpenTable. Hotel occupancy is down from a month ago. Consumer spending on credit cards dropped in the first week of November from a month earlier, according to data compiled by Opportunity Insights.