New home sales numbers tend to be volatile. Big increases and big declines aren’t uncommon. Revisions aren’t either. So the most recent numbers from the U.S. Census Bureau and the Department of Housing and Urban Development probably aren’t cause for too much concern. According to the data, sales fell 12.2 percent in November. That’s a significant decrease but there are a few factors that played an obvious role. One of them is mortgage rates. Rates hit highs in October and only began to ease during the month of November, so the sales numbers are likely reflecting that. Since then, average mortgage rates have been declining, which should result in an uptick in buyer demand. The sales decline also came at the time of year when sales typically begin to slow, as the holidays approach and the weather changes. Another sign that that the new-home sales trend is likely to turn around in the months ahead is builder confidence, which has shown builders are growing more optimistic. In fact, builders see sales conditions improving over the next six months. (source)