WASHINGTON (AP) -- Americans bought more new homes last month, the latest evidence that the U.S. housing market could be starting to recover.
New-home sales increased 3.3 percent in April from March to a seasonally adjusted annual rate of 343,000, the Commerce Department said Wednesday. Sales rose sharply in every region of the country but the South.
The gain pushed the annual sales pace to its second-highest level in two years. Economists were encouraged by the increase but cautioned that new homes are still selling at half the rate consistent with healthy markets.
The increase follows other reports this week that suggest steady improvement in housing. Sales of previously occupied homes rose to near a two-year high in April. And Toll Brothers, a key U.S. builder of luxury homes, reported that it returned to profitability in the second quarter.
A pickup in hiring, cheaper mortgages and lower home prices in most markets have made home buying more attractive.
"Housing could be a pleasant surprise this year," said Ellen Zentner, a senior economist at Nomura Securities. She said home construction would likely contribute to overall economic growth this year for the first time since 2005.
Sales of new homes rose 28 percent in April from March in the Midwest and the West, and 7.7 percent in the Northeast. Only in the South did sales fall, by 10.6 percent.
The median price rose to $235,700, a slight increase from March.
Toll Brothers said Wednesday that home deliveries and signed contracts on new homes rose in the quarter that ended April 30. Its shares rose more than 2 percent.
The homebuilder earned $16.9 million, or 10 cents per share, in the latest quarter. A year earlier it lost $20.8 million, or 12 cents per share.
On Tuesday, the National Association of Realtors said sales of previously owned homes increased 3.4 percent to a seasonally adjusted annual rate of 4.62 million. That nearly matched January's sales pace of 4.63 million, which had been the best in two years.
Though new homes represent less than 20 percent of the housing market, they have an outsize 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 statistics compiled by the National Association of Home Builders.
Builders have grown more confident since last fall, in part because more people are expressing interest in buying a home. In May, builder optimism rose to the highest level in five years, according to a monthly index compiled by the builders' group.
Homebuilders reported improving sales and higher traffic from prospective buyers, the survey showed. A gauge measuring confidence in sales over the next six months also increased.
Recent job gains have likely made it easier for more Americans to purchase a home. Employers have added 1 million jobs in the past five months. And unemployment has dropped a full percentage point since August, from 9.1 percent to 8.1 percent in April.
Mortgage rates, meanwhile, have fallen to record lows, making home-buying more affordable. Still, many would-be buyers are having difficulty qualifying for home loans or can't afford larger down payments required by banks.
Builders still face a tough environment. They are struggling to compete with deeply discounted foreclosures and short sales — when lenders allow homes to be sold for less than what's owed on the mortgage.