New home sales, prices rise in April

Wed May 23, 2012 10:35am EDT
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By Lucia Mutikani

WASHINGTON (Reuters) - New single-family home sales rose solidly in April and prices pushed higher, offering further evidence the housing market was turning the corner.

The Commerce Department said on Wednesday sales increased 3.3 percent to a seasonally adjusted 343,000-unit annual rate after a 332,000-unit pace in March.

The report, whose details were fairly bullish, came on the heels of news on Tuesday that home resales hit a two-year high in April and suggested the housing market recovery was gaining traction.

It also highlighted the economy's underlying strength, even though job growth has slowed in recent months. The weak housing market had been the Achilles heel of the economy's recovery from the 2007-09 recession.

"It's encouraging. These are signs that we might be forming a bottom in housing," said Omer Esiner, chief analyst at Commonwealth Foreign Exchange in Washington. "We'll need to see housing shore up before we can talk about a meaningful recovery in the U.S."

Stocks opened lower on worries about Greece's debt problems, while Treasury debt prices rose. The dollar extended gains against the euro after the home sales data.

Compared to April last year, new home sales were up 9.9 percent. Signs of life in the housing market were also bolstered by a 4.9 percent rise in the median price of a new home last month to $235,700 from a year ago.

A separate report from the Federal Housing Finance Agency showed house prices rose 1.8 percent in March after gaining 0.3 percent in February. Prices were up 2.7 percent from year ago.   Continued...

A newly built home is shown as sold in a subdivision under construction in Carlsbad, California February 21, 2012. REUTERS/Mike Blake