US New Home Sales rose 3.3 percent in April

Americans bought 3.3 percent more homes in April led by strong gains in Midwest and West.
By Martin Crutsinger, AP Economics Writer
May 23, 2012

WASHINGTON (AP) — Americans bought more new homes last month, the latest evidence that the U.S. housing market could be starting to recover.

New-home sales increased 3.3 percent in April from March to a seasonally adjusted annual rate of 343,000, the Commerce Department said Wednesday. Sales rose sharply in every region of the country but the South.

The gain pushed the annual sales pace to its second-highest level in two years. Economists were encouraged by the increase but cautioned that new homes are still selling at half the rate consistent with healthy markets.

The increase follows other reports this week that suggest steady improvement in housing. Sales of previously occupied homes rose to near a two-year high in April. And Toll Brothers, a key U.S. builder of luxury homes, reported that it returned to profitability in the second quarter.

A pickup in hiring, cheaper mortgages and lower home prices in most markets have made home buying more attractive.

“Housing could be a pleasant surprise this year,” said Ellen Zentner, a senior economist at Nomura Securities. She said home construction would likely contribute to overall economic growth this year for the first time since 2005.

Sales of new homes rose 28 percent in April from March in the Midwest and the West, and 7.7 percent in the Northeast. Only in the South did sales fall, by 10.6 percent.

The median price rose to $235,700, a slight increase from March.

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