The new home sales figures are notoriously volatile, particularly at the regional level.
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Purchases of new, single-family homes jumped 16.6% from a month earlier to a seasonally adjusted annual rate of 619,000, the Commerce Department said Tuesday. The consensus estimate from a survey of economists expected a rate of around 523,000.
The median sales price of new houses was a record $321,100 – up $28,400 from a year earlier, while the average sales price rose $45,100 to $379,800. The annual pace was highest since January 2008 -another piece of good news that may nudge the Federal Reserve even closer to raising interest rates in June. Prices aren’t adjusted for seasonal factors.
Broadly, housing data suggest the market has steadied after a choppy first quarter.
An April pickup in home buying was also evident in the much larger market of existing or used-home sales.
So far new home sales have declined each month thus far in 2016, however are now up a whopping 24 percent from last April.
Steady employment gains and low mortgage rates are supporting the overall market. Lower mortgage rates are helping: The average 30-year fixed rate mortgage was just 3.58 percent last week, according to mortgage buyer Freddie Mac.
That was an increase of 16.6% from the revised March rate of 531,000 and an increase of 23.8% compared with the April 2015 rate of 500,000.
But starts and sales remain below prerecession-and pre-housing bubble-levels. She said sales of new homes have been one area that has not fully recovered from the downturn.
The surge is in stark contrast to small declines in new home sales earlier this year.
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“Builders remain optimistic about the housing market, and this month’s jump in new home sales is a positive sign that growing demand will keep the housing sector on an upward trajectory through the spring buying season”, said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. That’s led to housing prices rising faster than wages.
