Sales of new single family homes in December rose to their highest level in 10 months as buyers snapped up cheaper homes in anticipation of higher interest rates.

The Commerce Department reported that December's increase put the seasonally adjusted annual sales pace to 811,000 for the month, an 11.9% increase over November's figure, which was revised down to 725,000 from 744,000.

The median price of a new home, the point where half the homes sold for more and half for less, fell to $377,700, last month, its lowest level since June but about 4% higher than December 2020.

This surge in new home sales, as Market Watch put it, has reinforced a report regarding new-home construction which was released earlier in the month. Contract signings for home purchased jumped nearly twelve percent, according to Bloomberg.

Danielle Hale, a chief economist at Realtor.com told Market Watch, “The new year holds both promise and potential pitfalls for the housing market and homebuyers. As builders make headway on backlogs, we expect more options for homebuyers. But, the cost of getting in the door will rise for homebuyers,”

The Mortgage Bankers Association reported on Wednesday that mortgage applications fell 7.1% on the week ending Jan. 21, compared to the previous week, according to the Associated Press.