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New home sales in the U.S. dropped last month as mortgage rates have soared.

According to the U.S. Census Bureau, new home sales fell 5.6% in October, more than expected.

“The median sales price of new houses sold in October 2023 was $409,300,” the Bureau said in its announcement. “The average sales price was $487,000.”

According to the Federal Reserve Bank of St. Louis, the average 30-year fixed mortgage rate in the U.S. in October rose to nearly 8% before dipping closer to 7% in November. About this time in 2021, the average rate was around 3%.

That interest rate spike has been fueled in large part by the U.S. Federal Reserve, which has hiked the federal funds rate about a dozen times since March of last year in an effort to combat elevated inflation.

Both inflation and those rates can eventually come down, but it would take time.

“With interest rates edging higher in October, it was expected that new home sales would disappoint, however, as mortgage rates inched lower following Treasury's November 1 announcement of lower than anticipated funding needs, coupled with the market's perception of a decidedly more dovish Fed, rates have edged lower fueling a climb in mortgage applications,” Quincy Krosby, Chief Global Strategist for LPL Financial, said in a statement.