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Sales of new U.S. homes plummeted 8.9 per cent in October, as the number of newly built, unsold homes sitting on the market climbed to its highest level since 2009.

The Commerce Department says that new homes sold at a seasonally adjusted annual rate of 544,000 last month. New-home sales have declined in four of the past five months. Over the past 12 months, sales of new homes have dropped 12 per cent as higher mortgage rates have caused would-be buyers to back away.

The decline has left home builders with 336,000 homes available to buy, the highest level since January 2009 when the real estate market was still sorting through the wreckage of the last decade’s housing bubble.

The median sales price has tumbled 3.1 per cent from a year ago, to $309,700.

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