A home for sale in San Francisco.ROBERT GALBRAITH/Reuters
New U.S. single-family home sales surged in May to a one-year high and prices rose from a year ago amid tightening supply, further signs the housing market was gaining some momentum.
The Commerce Department said on Monday sales jumped 7.6 per cent to a seasonally adjusted 369,000-unit annual rate, the highest since April 2010.
Economists polled by Reuters had forecast sales at a 346,000-unit rate last month from April's 343,000-unit pace. March's sales pace was revised up to 347,000 units from the previously reported 332,000 units.
Compared to May last year, new home sales were up 19.8 per cent.
The housing market is showing signs of life even as the broader economy is weakening, and residential construction is expected to contribute to gross domestic product this year for the first time since 2005.
Data last week showed a jump in home building intentions in May and a fourth straight month of gains in the median price of a previously owned home.
The improving housing market picture was further enhanced by a 5.6-per-cent rise in the median price of a new home to $234,500 from May last year.
While the inventory of new homes on the market edged up 0.7 per cent to 145,000 units last month, it remained near record lows. At May's sales pace it would take 4.7 months to clear the houses from the market, the lowest since October 2005, down from 5.0 months in April.
New home sales last month were buoyed by a 36.7-per-cent jump in the Northeast and a 12.7-per-cent rise in the South. Sales in the West fell 3.5 per cent and were down 10.6 per cent in the Midwest.