New single-family home sales increased for the third month in a row in December, rising 2.3% month over month to an annual rate of 616,000, while the median price of a new home sold during the month dipped 3.7% compared to November, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported.      

Year over year, the pace of newly built home sales in December was down 26.6% from the year-ago rate of 839,000.      

The median sales price of a new house sold last month declined to $442,100 from $459,000 in November; it was up 7.8% from the year-ago price of $410,000.      

“Lower mortgage rates, builder incentives and a lack of existing-home inventory might make new homes attractive enough to entice more buyers,” First American Deputy Chief Economist Odeta Kushi said. “The latest uptick in builder confidence is a sign that builders believe lower mortgage rates may lift demand.” 

By region, the pace of new-construction home sales was mixed, with monthly gains of 35.2% and 6.5% in the Midwest and South, respectively, and declines of 19.4% and 15.3% in the Northeast and West, respectively.  

Months’ supply of homes for sale fell to 9.7 months from 10.9 months in November; in December 2021, there was a 6.4-month supply of homes.