New home sales rose 8% from November to December to a seasonally adjusted annual rate of 664,000, according to a report Thursday from the Census Bureau, indicating that the lack of supply of previously owned homes is directing buyers to newly built units.

Sales in December were 4.4% higher than in December 2022.

The median sales price for a new home was $413,200 in December, the lowest it has been since the latter half of 2021. New home prices have generally fallen since peaking at nearly $497,000 in October 2022. Still, new home prices are 33% higher than their trough at the start of the pandemic.

“New home prices fell for a fourth consecutive month, with the median new home price slipping to its lowest level in two years,” Oxford Economics economists said in a note on the report. “The December decline in prices reflected builder incentives and a shift in the composition of sales toward less expensive homes.”

Existing home sales fell in the month, the National Association of Realtors reported, as high mortgage rates put downward pressure on families’ home purchasing power. Mortgage rates recently crossed the 8% threshold, the highest in 23 years, before pulling back.

As of Thursday, the average rate on a 30-year, fixed-rate mortgage was 6.95%, according to Mortgage News Daily, which tracks daily changes in rates.

Over the past year or so, high mortgage rates have created an unusual dynamic between the sales of new and existing homes, as people who locked in low mortgages during the pandemic aren’t selling because of the higher mortgage rates now, taking away existing home inventory and putting upward pressure on new home sales.

Existing home sales fell in December to the lowest level in more than a decade.

Existing home sales in December slowed 1% to a seasonally adjusted annual rate of 3.78 million, the National Association of Realtors reported last week. Sales of existing homes in December were at the lowest level since August 2010, and the pace of existing home sales is down 6.2% from the year before.

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Also last week, in a bit of good news for the housing market, housing starts ticked up.

Housing starts, the change in the number of new residential buildings that began construction, rose 1.9% from November to this past month, according to a Thursday report from the Census Bureau. From December 2022, they rose by 6.1%.