Surge in new-home sales driving up prices
WASHINGTON (AP) -- U.S. sales of new homes rose in April and nearly matched the fastest pace in five years, driving the median price to a record high. The gains suggest the housing recovery is strengthening.
New-home sales increased 2.3 percent in April from March to a seasonally adjusted annual rate of 454,000, the Commerce Department said Thursday. That's only slightly below January's pace of 458,000, which was the fastest since July 2008.
Steady job creation and near-record-low mortgage rates are spurring more Americans to buy homes. Sales are still below the 700,000 pace consistent with healthy markets, but they have risen 29 percent over the past year.
The median sales price jumped 8.3 percent in April from March to $271,600. That's highest on records going back to 1993. The median sales price is not adjusted for inflation.
Prices are rising quickly because more people are bidding on a limited number of homes.
The supply of new homes for sale increased 3.3 percent in April to 156,000. That's the most in 18 months, although it's still only slightly above the record low of 142,000 set in July 2012.
Economists at Credit Suisse said the solid rise in prices reflected an effort by builders to keep supplies lean to help propel home prices higher.
Still, builders are growing more confident in the housing recovery and have started to ramp up construction. In April, they requested permits to build homes at fastest pace in nearly five years.
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