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Associated Press
A construction crew works on a Trenton, N.J., housing complex. Sales of new homes rose 2.3 percent from March to April.

New-home sales, prices rev up

2.3% jump in April a virtual 5-year high as median cost rises

– 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, $271,600, jumped 8.3 percent in April from March. That’s the 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 ramped up. In April, they sought permits to build homes at the fastest pace in nearly five years.

“April’s new home sales are further evidence of a rebounding national housing market,” said John Tashjian, an executive with Centurian Real Estate Partners in New York City. “Over the past 18 months, we have seen housing pull itself off the mat and spring back to life.”

Sales of new homes increased 10.8 percent in the West in April and 3 percent in the South.

They fell 16.7 percent in the Northeast and 4.8 percent in the Midwest.