New-Home Sales Climbed in April, Building Optimism

The spring home-selling season got off to a strong start in April, the Commerce Department said Wednesday, with rising sales and prices providing evidence that a housing market recovery was gaining some traction.

The New York Times


The residential real estate sector has been the Achilles’ heel of the economy ever since the housing bubble burst. Data this week, however, has painted an upbeat picture for the market and underscored the economy’s resilience.

“The recent buoyancy in housing market activity has raised hopes that this beleaguered sector may finally be on the verge of a rebound,” said Millan Mulraine, senior macro strategist at TD Securities in New York.

New-home sales increased 3.3 percent to a seasonally adjusted 343,000-unit annual rate, the Commerce Department said. Compared with April last year, sales were up 9.9 percent.

The report came on the heels of news on Tuesday that home resales hit a two-year high, with the sector getting support from investors who are increasingly seeing value.

Even more encouraging, the median price for both new and previously owned homes surged last month, a further sign of life for a market that has struggled to come back from its 2006 collapse.

The median price of a new home rose to $235,700 last month, up 4.9 percent from a year ago.

A separate report from the Federal Housing Finance Agency showed house prices in March were up 2.7 percent from a year ago, the largest gain since November 2006. The increase reflected a 1.8 percent rise in March from February, the biggest monthly increase on records dating to 1991.

Still, prices by the finance agency’s measure remain about 18 percent below the peak reached in April 2007. Other measures suggest prices have even further to climb to make up the lost ground.

“Even though we have seen home prices start to turn, our concern is that in the second half of the year as more foreclosures come into the market, we could see a dip in prices,” said Jeremy Lawson, a senior economist at BNP Paribas in New York.

A version of this article appeared in print on May 24, 2012, on page B6 of the New York edition with the headline: New-Home Sales Climbed in April, Building Optimism.