The Commerce Department reported Tuesday that new home sales of single-family units rose more than expected in April and the median price surged. Sales increased 6.8 percent to a seasonally adjusted annual rate of 517,000 units. March’s sales pace was revised up to 484,000 units from the previously reported 481,000 units.
Economists polled by Reuters had forecast new home sales, which account for 9.3 percent of the market, rising to a 510,000-unit pace last month. New homes sales jumped 36.8 percent in the Midwest to a seven-year high and increased 5.8 percent in the South, where most of the construction takes place. However, sales fell 5.6 percent in the Northeast and 2.3 percent in the West.
Still, despite the upbeat report, the stock of new houses available on the market rose 0.5 percent last month to 205,000, while supply remains less than half of what it was at the height of the housing boom before the bubble.
At April sales pace it would take 4.8 months to clear the supply of houses on the market, down from 5.1 months in March.
With supply still tight, the median price for a new home rose 8.3 percent from a year ago to $297,300, which could reduce affordability.
