New home sales jumped in April; first increase since January

Posted: May 27, 2014 in California Real Estate News, National Real Estate News

New home sales rose more than expected in April, indicating the housing market may be heating up.

Sales of recently built single-family homes jumped 6.4% from March to a seasonally adjusted annual rate of 433,000, the Commerce Department said Friday.

It was the first increase since January and larger than analysts predicted. Economists polled by Bloomberg News had called for a 425,000 April rate.

The data come one day after sales of previously owned homes climbed 1.3% in April. Those dual increases signal some underlying strength in a housing recovery that has cooled recently.

Buyers have struggled to afford a home after prices jumped last year. And severe weather across much of the country earlier this year also depressed sales.

New home sales are still 4.2% below April 2013 levels.

But mortgage rates have stabilized after jumping last year and remain at historically low levels.That could entice more buyers into the market.

The sales increase from March came largely from the Midwest, where buyers scooped up new homes at a 47.4% faster rate in April.

New home sales rose 3.1% in the South, while remaining flat in the West, a major home building region. Sales dropped 26.7% in the Northeast.

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