(CP) WASHINGTON - More people bought new homes for a second straight month in April, a hopeful sign. Still, sales remain far below the pace that would represent a healthy housing market.
New-home sales rose 7.3 per cent last month to a seasonally adjusted annual rate of 323,000, the Commerce Department said Tuesday. A normal housing market would mean a pace of about 700,000 new-home sales a month.
People have little incentive to buy new homes, in part because they're comparatively expensive. The median price of a new home rose more than 2 per cent from March to $217,900. New-home prices are more than 30 per cent higher the median price of re-sales — twice the normal markup.
Last year, Americans bought the fewest number of new homes on records going back 47 years. High unemployment, tight credit and a lingering fear that prices will fall further have discouraged many would-be buyers.
Still, Brad Hunter, chief economist with Metrostudy, noted that the number of foreclosures has slowed in some areas because of backlogged state courts. A result is that builders in desirable locales are "raising prices, indicating some recovery in those submarkets."
Sales rose in every region last month. They jumped more than 15 per cent in the West, 7.7 per cent in the Northeast, nearly 5 per cent in the Midwest and more than 4 per cent in the South.