Interest rates on fixed 30-year mortgages continued to drop in the past week, averaging 3.53 percent from 3.54 percent the week before. Yet according to the Mortgage Banker’s Association, its seasonally adjusted index of mortgage application activity—including refinancing and home purchase requests—dropped .9 percent in the week that ended Nov. 23.

More concerning is the Commerce Department’s report today that sales of new single-family homes fell .3 percent in October to 368,000 when seasonally adjusted, and the promising results for September were adjusted downward to 369,000. Based on the newest data, the sales of new homes are still below their May levels, in spite of the Federal Reserve’s newest round of quantitative easing, which has moved to continue to reduce mortgage interest rates.

“While housing has bottomed and it’s clearly moving in the right direction, we just don’t know how much momentum it’s going to be able to gather in an environment where the labor backdrop, whether defined by job growth or wages, is itself not gathering much momentum,” Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York, told Bloomberg before the report.

Good news was to be had in the Commerce Department’s report as well, however. Median home prices for new homes rose a full 5.7 percent from their position a year ago, signaling a strengthening economy.

Some regions had stronger sales than others. According to the Commerce Department’s report, sales in the Midwest rose to their highest level in nearly three years with a 62.2 percent increase last month.

Although not as high, sales in the West were still promising, increasing 8.8 percent—their highest jump since July 2008. In the Northeast, however, home sales dropped 32.3 percent. The Commerce Department said, however, that superstorm Sandy had minimal effect on the data.

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