Single-family houses make up roughly two-thirds of the residential construction market. The pace of homebuilding has rebounded from the depths of the recession. But sales of new single-family homes have grown more slowly, and higher mortgage rates could slow them further.
Both the October and September figures were released Monday, after reporting was delayed due to shutdown in October. The government also said spending in August and July were less than initially reported.
Mortgage rates are nearly a full percentage point higher than the spring. Rates rose in May when the Federal Reserve first signaled that it might slow its $85 billion in monthly bond purchases. But rates have moderated from recent highs after the Fed decided to keep its bond buying intact.
The average rate on a 30-year fixed mortgage was 4.29 percent, which is still close to historic lows.
Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to National Association of Home Builders.