U.S. new home sales trumped expectations in October, but economists see worse times ahead.

“New home sales in October came in well above expectations, confirming that the housing market remains a source of stability,” says BMO Nesbitt Burns, noting that sales are on pace to beat the previous annual record high of 886,000, set in 1998.

The past few weeks have seen a resurgence in interest amongst homebuyers, mostly attributable to falling interest rates, BMO said, recalling that in a separate release earlier this week, sales of existing homes rose 5.5% in October to 5.17 million units.

“Low mortgage rates have been a major source of support for the housing market,” says BMO. “But rising unemployment, coupled with the steady drop in consumer confidence, points to a cooling of home sales in the near-term.”