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 Sales increased 6.4 percent to a seasonally adjusted annual rate of
433,000 units, the Commerce Department said on Friday.
The rise ended two straight months of declines and beat Wall Street
expectations, but sales remained in line with their sluggish
first-quarter average.
"The data have yet to show a meaningful pickup in activity early on
in the spring following the unusually harsh winter," said Daniel
Silver, an economist at JPMorgan in New York.
But investors welcomed the report and snapped up homebuilder shares,
such as Lennar Corp <LEN.N> and D.R. Horton Inc <DHI.N>.
A run-up in mortgage rates and home prices over the last year has
weighed on the market. Sales have also been hampered by a shortage
of properties and the brutally cold winter.
The slump has caught the attention of the Federal Reserve, which is
scaling back the amount of money it is pumping into the economy
through monthly bond purchases.
Minutes of the Fed's April 29-30 policy meeting released earlier
this week showed officials citing a range of factors for the
weakness, including "higher home prices, construction bottlenecks
stemming from a scarcity of labor and harsh winter weather, input
cost pressures, or a shortage in the supply of available lots."
Sales of previously owned homes rose in April, with the inventory of
houses for sale reaching the highest level in nearly two years, a
report showed on Thursday.
And, according to Freddie Mac, rates on fixed 30-year mortgages fell
to an average of 4.14 percent this week, a near seven-month low,
which should help to improve affordability.
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GLIMMERS OF HOPE
But there are glimmers of hope.
"We're still digging ourselves out of the soft patch we saw last
fall and this winter," said Diane Swonk, chief economist at Mesirow
Financial in Chicago.
In the Midwest, new home sales jumped to their highest level since
November 2007 last month. Sales also rose in the South. But they
were flat in the West and recorded their largest decline since
October 2012 in the Northeast.
The inventory of new houses on the market increased 0.5 percent to
192,000 units, the highest level since November 2010. Nevertheless,
the stock of new houses on the market remains more than 50 percent
below its pre-recession level.
At April's sales pace it would take 5.3 months to clear the supply
of houses on the market, down from 5.6 months in March. With
inventories rising, the median price of a new home fell 1.3 percent
to $275,800 from April last year.
(Reporting by Lucia Mutikani,; Editing by Andrea Ricci)
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