WASHINGTON -- Sales of new homes climbed to the second highest level on record in April, increasing a surprisingly strong 9.2 percent, the government said Wednesday.
The Commerce Department reported that the increase in sales of new single-family homes followed four straight months of declines.Analysts had expected a fifth straight decline in April, contending that rising mortgage rates were cooling off what had been a red hot housing market.
However, the new report showed strong sales in every region of the country except the West.
The strong activity pushed sales of new homes to a seasonally adjusted annual rate of 978,000 units last month, the second highest level on record. The all-time high was a sales rate of 985,000 units set last November.
The housing industry has been one of the main beneficiaries of the country's current good economic times. The lowest unemployment rate in three decades, record high levels of consumer confidence and low interest rates pushed new home sales to an 11-year high last year.
Analysts have been predicting a slowdown in this sector because mortgage rates have been creeping up in recent weeks. A national survey of mortgage rates showed them hitting 7.23 percent for the past two weeks, the highest level in 18 months.
Existing home sales did decline in April by 3.3 percent, but that drop was from a record high set in March.
The report on new home sales showed that the surge in demand was accompanied by a rise in prices. The median price of all new homes sold last month climbed 3 percent to a record $159,500. The median is the midpoint where half the homes sold for more and half for less.
The average sales price rose 3.7 percent to a record as well of $193,100.
All regions of the country except the West enjoyed strong increases in sales last month.
Sales surged 33.5 percent to an annual rate of 211,000 units in the Midwest. Sales were up 17.1 percent to a rate of 89,000 units in the Northeast and climbed 7.5 percent to a rate of 429,000 units in the South.
The West, which had seen sales jump 22.9 percent in the previous month, suffered a drop of 5.3 percent in April to an annual rate of 249,000 units.