WASHINGTON (AP) -- Sales of new homes likely rose in April, evidence that the housing market is gaining strength during the critical spring buying season.
Economists forecast that new-home sales rose to a seasonally adjusted annual rate of 426,000 in April, according to a survey by FactSet.
The report from the Commerce Department is due at 10 a.m. Eastern.
In March, sales increased to a rate of 417,000. That was close to January's pace of 445,000, the fastest since July 2008.
New-home sales are still below the 700,000 level considered healthy by most economists. But the pace has increased 18.5 percent from a year ago.
Steady job creation and near-record-low mortgage rates are spurring more Americans to buy homes. Sales of previously owned homes rose in April to a seasonally adjusted annual rate of 4.97 million, the highest level in 3½ years.
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. While construction of new homes and apartments slipped a bit in April, the drop came one month after construction topped 1 million for the first time since June 2008.
Higher prices tend to make homeowners feel wealthier. That encourages consumers to spend more, which accounts for 70 percent of economic activity.
Federal Reserve Chairman Ben Bernanke cited the revival in housing as a significant benefit of the Fed's super-low interest rate policies.
"Higher prices of houses and other assets, in turn, have increased household wealth and consumer confidence, spurring consumer spending and contributing to gains in production and employment," Bernanke said in an appearance before the congressional Joint Economic Committee.
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.
