New home sales leapt in December

January 27, 2015, 4:05 PM UTC
Views Of A KB Home Development As Earnings Beat Estimates
A "For Sale" sign is displayed in front of a house at the KB Home's Whisler Ridge housing community in Lake Forest, California, U.S., on Monday, Sept. 23, 2013. KB Home, a U.S. homebuilder that targets first-time buyers, reported third-quarter earnings that beat analyst estimates as prices and sales jumped. Photographer: Patrick Fallon/Bloomberg via Getty Images
Photograph by Patrick Fallon — Bloomberg/Getty Images

New home sales leapt a better-than-expected 12% in December, closing out a strong year for the housing market on a positive note.

Sales of new single-family homes leapt to a seasonally adjusted annual rate of 481,000, the Commerce Department reported, better than the 452,000 economists projected according to a survey conducted by Bloomberg. The median sales price increased to $298,100 in December from $291,600 the prior month.

Overall, an estimated 435,000 new homes were sold last year, up from 429,000 in 2013.

The housing sector has been a fairly consistent performer, with most metrics indicating an improvement even as lending standards remain constrained. But the pace of activity can at times remain frustratingly slow, with both starts and permits of new single-family homes increasing only a little in October and November, a worrisome trend that the Federal Reserve recently flagged as a concern.

Still, prices have recovered. And Fortune recently reported that household formation in 2014 through September already was at its highest level since 2005.