US Housing Sector Stabilizing? April New Home Sales Rise 3.3%

Sales of new single-family homes in the U.S. rose more than expected in April and prices climbed higher, a fresh sign of life in the distressed housing market.

The Commerce Department said Wednesday that new-home sales gained 3.3 percent last month to a seasonally adjusted annual rate of 343,000.

The results topped economists' expectation of a 335,000-unit rate of sales. Compared to April of last year, purchases of new homes were up 9.9 percent.

March's figures on new-home sales were revised higher to 332,000 from an original reading of 328,000.

Purchases increased in three of four U.S. regions in April, led by 28 percent gains in both the Midwest and West. Only the South reported a decline, with sales down 10.6 percent in April.

The median sales price increased 4.9 percent last month from the year-ago period, to $235,700, the report showed.

The supply of new homes on the market rose 1.4 percent to 146,000 from 144,000 in March, but remained near record lows. March's data was the fewest on records dating back to 1963.

At April's sales pace it would take 5.1 months to clear the houses from the market, down from 5.2 months in March.

Meanwhile, March's FHFA house price index, also released Wednesday, added to the upbeat tone of the housing data by posting its largest ever monthly gain, of 1.8 percent. In the first quarter as a whole, FHFA house prices rose by 0.5 percent, only the second quarterly gain since this measure started falling in early-2007.

Wednesday's reports came after earlier reports had appeared to show that the housing market is stabilizing.

Sales of previously owned homes in the U.S. rose 3.4 percent in April, reversing three months of declines. U.S. home building jumped in April, but permits for new construction dropped, clouding the outlook.

The National Association of Home Builders last week reported its housing-market confidence index reached a five-year high of 29 in May. At the height of the building bubble, readings were in the high 60s and low 70s, well above the 50 reading considered positive.