WASHINGTON, D.C.: Sales of new homes in the United States surged in April to their best level since January 2008 despite tight supplies and rising prices, the Commerce Department reported on Tuesday.
As the Spring home shopping season opened, pent-up demand, rising household incomes and ultra-low mortgage rates supported the buying.
New home sales jumped to an annual pace of 619,000 units, 23.8 percent over the April 2015 figure and well up from the 531,000 unit annual pace of the first three months of this year.
The median price surged to $321,100, up nearly $25,000 from the 2015 average, and supplies remained tight.
But a pickup in the number of new homes on the market suggests builders are working hard to meet demand.
An April pickup in home buying was also evident in the much larger market of existing or used-home sales.
Existing home sales rose to an annual rate of 5.45 million last month, compared to an average of 5.3 million over the first quarter, the National Association of Realtors reported last week.
Some analysts had doubts about the strength of the new home sales report, given the month-to-month volatility of sales data.
“We suspect the strength is greatly exaggerated,” said Jim O’Sullivan of High Frequency Economics, suggesting sales data could fall somewhat in the coming months.
Ian Shepherd of Pantheon Macroeconomics agreed that the surge is likely overstated, but that the market is nevertheless strengthening.
“The jump in April is statistically significant . . . and it is consistent with the increase in mortgage demand. Easier credit conditions mean that the sustained surge in employment is finally boosting the pool of potential buyers who can qualify for mortgages,” he said in a client note.