Sales of new American homes rose in May to the fastest pace in five years, a solid gain that added to signs of a steadily improving housing market. The Commerce Department says sales rose 2.1% last month compared with April to a seasonally adjusted annual rate of 476,000, the highest level since July 2008. The median price of a new home sold in May was $263,900, up 3.3% from a year ago.
Sales of new homes remain below the 700,000 annual pace that's considered healthy by most economists. But the pace has increased 29% from a year ago. Analysts say the housing recovery is looking more sustainable and should continue to boost economic growth this year, offsetting some drag from higher taxes and federal spending cuts.