A federal regular on Tuesday increased the size of mortgages eligible for backing by Fannie Mae and Freddie Mac after a record-setting surge in home prices.
The volume of signed contracts to purchase homes jumped as Americans rushed to secure financing before mortgage rates rose higher.
New-home sales in October rose to the highest level since April, according to a Commerce Department report.
Existing home sales in October rose to the highest level since January, according to a Monday report from the National Association of Realtors.
Rates rose after a report showed inflation spiked to 6.2% in October as supply-chain bottlenecks caused by the pandemic fueled price increases.
Residential builders are still being challenged by a lack of materials and workers, said Mark Vitner, a Wells Fargo senior economist.
"Red-hot demand for workers" will send U.S. jobless rate tumbling, the economists said.
Homebuilder confidence rose in November, the third consecutive month of gains, despite supply-chain bottlenecks that slowed deliveries.
Consumer confidence fell in November to the lowest level in a decade as inflationary concerns weighed on the mindsets of Americans.
The top reason to move, according to sellers, was the desire to be close to friends and family. The No. 2 reason was the need for more space, according to the NAR report.
