WASHINGTON (Reuters) - Sales of new U.S. single-family homes increased more than expected in December, further evidence that housing market activity regained momentum at the end of 2024, though rising mortgage rates remain a constraint.

New home sales rose 3.6% to a seasonally adjusted annual rate of 698,000 units last month, the Commerce Department's Census Bureau said on Monday. The sales pace for November was revised higher to a rate of 674,000 units from the previously reported 664,000 units.

Economists polled by Reuters had forecast new home sales, which account for about 15% of U.S. home sales, rising to a rate of 675,000 units. New home sales are counted at the signing of a contract, and can be volatile on a month-to-month basis. They increased 6.7% year on year in December.

An estimated 683,000 new homes were sold in 2024, up 2.5% compared to 2023.