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US New Home Sales Rise; Mortgage Rate Ticks Up

ASSOCIATED PRESS - Sales of new homes rose in April to the second highest level since the summer of 2008 while the median price for a new home hit a record high, further signs that housing is recovering. A separate report out on Thursday showed that average rates on fixed mortgage rose for the third straight week, hitting their highest levels since mid-March.

New-home sales rose to a seasonally adjusted annual rate of 454,000 in April, the Commerce Department said Thursday. That was up 2.3 percent from March. Both January and April had the fastest sales rates since July 2008. The median price of a home sold in April was $271,600, the highest level on government records going back to 1993. The April price was 8.3 percent higher than in March and 13.1 percent higher than a year ago.

 

Greater demand, along with a tight supply of available homes for sale, is also boosting prices in most markets and encouraging more construction. Applications for permits to build homes rose in April to the highest level in nearly five years.

Several major homebuilders have reported strong annual increases in orders for the first three months of the year, Ryland Group Inc., said that its orders in April jumped 59 percent from a year earlier.

Though new homes represent only a fraction of the housing market, they have a sizable 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 data from the National Association of Home Builders

Mortgage Rates Rise

Average rates on fixed mortgage rose for the third straight week, hitting their highest levels since mid-March. Still, mortgage rates remained close to historic lows, a trend that should help sustain the housing recovery.

Mortgage buyer Freddie Mac says the average rate for the 30-year loan increased to 3.59 percent this week. That's up from 3.51 percent last week and above the rate of 3.31 percent reached in November, the lowest on records dating to 1971.

Cheaper mortgages are a key reason home sales have increased this year. That's helped boost home prices and construction, too.

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