WASHINGTON, May 24 (Reuters) - New U.S. single-family home sales surged to a more than eight-year high in April and prices hit a record high, offering further evidence of a pick-up in economic growth early in the second quarter.
The Commerce Department said on Tuesday new home sales jumped 16.6 percent to a seasonally adjusted annual rate of 619,000 units, the highest level since January 2008. The percent increase was the largest since January 1992.
March’s sales pace was revised up to 531,000 units from the previously reported 511,000 units. Economists polled by Reuters had forecast new home sales, which account for about 10.2 percent of the housing market, rising to only a 523,000 unit-rate last month.
New home sales are volatile month-to-month and April’s increase probably exaggerates the housing market strength.
Still, last month’s gain pushed new home sales well above their first-quarter average of 531,667 units. New home sales increased in three regions, but fell in the Midwest.
The report came in the wake of fairly upbeat data on home resales and residential construction. It also added to retail sales and industrial production reports in suggesting that the economy was gathering speed after growth almost stalled in the first quarter.
The housing market is being underpinned by a tightening labor market, which is starting to lift wages, a well as still very low mortgage costs. But a shortage of properties available for sale remains a hurdle and house prices have risen faster than wages, sidelining some first-time buyers.
Last month, the inventory of new homes on the market fell 0.4 percent to 243,000. At April’s sales pace it would take 4.7 months to clear the supply of houses on the market, down from 5.5 months in March.
With supply tight, the median price for a new home increased 9.7 percent from a year ago to a record $321,100.
New single-family homes sales soared 15.8 percent in the populous South to the highest level since December 2007. Sales jumped 52.8 percent in the Northeast to their highest level since October 2007.
Sales in the West, which have been volatile in recent months, rose 18.8 percent after plunging 15.2 percent in March. The West has seen a sharp increase in home prices amid tight inventories. Single-family homes sales fell 4.8 percent in the Midwest. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)