While new home sales posted a modest gain in December, elevated mortgage rates and higher construction costs continue to hinder housing affordability and dampen consumer demand. Sales of newly built, single-family homes in December increased 2.3% to a 616,000 seasonally adjusted annual rate from a downwardly revised reading in November, according to newly released data by HUD and the U.S. Census Bureau. New home sales were down 16.4% in 2022 compared to the previous year. A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the December reading of 616,000 units is the number of homes that would sell if this pace continued for the next 12 months. New single-family home inventory remained elevated at a 9 months’ supply (of varying stages of construction). A measure near a 6 months’ supply is considered balanced. The count of homes available for sale, 461,000, is up 18.5% over last year. The median new home sale price in December was $442,100, down 3.7% from November. But it is still up 7.8% compared to last year due to higher construction costs. Regionally, on a year-to-year basis, new home sales fell in all four regions, down 8.2% in the Northeast, 22.1% in the Midwest, 13.0% in the South and 23.5% in the West.