Buyers Flock to New Homes

Sales of new homes in October were much stronger than expected and rose to record rates, signaling that consumers might be rushing to buy homes before mortgage rates get too high.

The U.S. Department of Commerce said Tuesday that sales of new homes in October rose 13% from the September annualized rate. The seasonally adjusted annual rate for October was 1.42 million, topping July's record of 1.37 million and surpassing September's revised rate of 1.26 million. The October pace was 9% above the rate from a year earlier.

Economists were expecting new-home sales to drop to a 1.2 million rate in October, according to Reuters. The 13% rise in the sales rate was the highest monthly jump since 1993, according to Wachovia research. ...