USA Today
WASHINGTON (AP) — Sales of new homes rose unexpectedly in April to the fastest pace this year, but the level of unsold homes rose to a record high.
The Commerce Department reported that sales of new single-family homes increased 4.9% last month to a seasonally adjusted annual rate of 1.198 million units, the highest rate since December.
The pace of activity caught economists by surprise. They had been expecting a decline in sales, reflecting rising mortgage rates that stand at the highest level in nearly four years.
However, the April pace was down 5.7% from the year-ago rate.
April’s median home price rose 2.8% to $238,500 from March. That represented a 0.9% increase over the $236,300 median sales price in April 2005, far below the double-digit price gains sellers had been enjoying during the recent sales boom.
The backlog of unsold homes rose 2.4% to a record of 565,000 homes on the market at the end of April. At the April sales pace, it would take 5.8 months to deplete that backlog.
Most economists believe the slowdown in housing will be gradual as long as inflation pressures remain moderate enough to allow the Federal Reserve to soon take a pause in its two-year campaign to push interest rates higher.
For April, home sales were strong in all parts of the country except the Midwest, where sales fell 1.1%, the second straight monthly declines. Sales were up 8.2% in the Northeast, reflecting a rebound after a drop of 7.6% in March. Sales were up 7.8% in the South and 2% in the West.