2:27 PM
Swee Ng
Americans bought more new homes in April, the latest signal that the U.S. housing market is steadily improving.
The Commerce Department said Wednesday that sales increased 3.3 percent in April from March to a seasonally adjusted annual rate of 343,000.
Sales were up in all regions except the South. The median price rose to $235,700, a slight increase from March.
Even with gain, the pace of new-home sales is well below the 700,000 annual rate that economists equate with healthy markets. Still, the broad-based gains across the country contributed to growing evidence that the home market could finally be rebounding nearly five years after the housing bubble burst.
Separately, U.S. homebuilder Toll Brothers said home deliveries and signed contracts on new homes rose in its latest quarter. Its shares rose more than 2 percent.
The homebuilder earned $16.9 million, or 10 cents per share, for the three months ended April 30. A year earlier it lost $20.8 million, or 12 cents per share.
A pickup in hiring and cheaper mortgages, combined with lower home prices in most markets, has made home buying more attractive. Builder confidence has increased steadily since the fall.
On Tuesday, the National Association of Realtors said sales of previously owned homes increased 3.4 percent to a seasonally adjusted annual rate of 4.62 million. That nearly matched January's sales pace of 4.63 million, which had been the best in two years.
Though new homes represent less than 20 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics compiled by the National Association of Home Builders.
Builders have grown more confident since last fall, in part because more people are expressing interest in buying a home. In May, builder optimism rose to the highest level in five years, according to a monthly index compiled by the builders' group.
Homebuilders reported improving sales and higher traffic from prospective buyers, the survey showed. A gauge measuring confidence in sales over the next six months also increased.
Recent job gains have likely made it easier for more Americans to purchase a home. Employers have added 1 million jobs in the past five months. And unemployment has dropped a full percentage point since August, from 9.1 percent to 8.1 percent in April.
Mortgage rates, meanwhile, have fallen to record lows, making home-buying more affordable. Still, many would-be buyers are having difficulty qualifying for home loans or can't afford larger down payments required by banks.
Builders still face a tough environment. They are struggling to compete with deeply discounted foreclosures and short sales -- when lenders allow homes to be sold for less than what's owed on the mortgage.
via businessweek
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