New home sales increased 2.3% month-over-month in December to a seasonally adjusted annual rate of 616,000 units (consensus 614,000) from a downwardly revised 602,000 (from 640,000) in November. On a year-over-year basis, new home sales were down 26.6%.
The key takeaway from the report is that it reflects how the pullback in mortgage rates has spurred some renewed demand among home buyers; however, affordability and supply pressures remain for many prospective buyers and that is holding back overall sales.