DEMAND for new homes in the US increased more than forecast in April as low mortgage interest rates and an improving economy attracted buyers.
Purchases rose to a 343,000 annual rate, up 3.3pc from a revised 332,000 in March, the US Commerce Department reported yesterday in Washington. Economists had expected a figure of 335,000. Data released earlier showed sales of existing homes rose in April in every region.
Job growth, affordability and record-low interest rates are bringing single-family homes within reach of more buyers, chipping away at a weakness in the world's largest economy as risks from Europe's debt crisis climb.
At the same time, banks remain reluctant to lend and foreclosures continue to move through the system, which means a sustained housing recovery will take time to develop.
"It's very clear now that the housing market has turned a corner," said Richard DeKaser, deputy chief economist at Parthenon Group in Boston. "The only question is how strong the rebound is going to be. It bodes well for the broader economy."
Purchases increased in three of four US regions last month, led by 28pc gains in both the Midwest and West.