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US new home sales rose 2.1 per cent in May to 476,000 annual rate, fastest pace in 5 years

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In this Monday, May 6, 2013 photo, construction is underway on the infrastructure of a multi-acre housing development in Zelienople, Pa. The Commerce Department reports on new-home sales for May, on Tuesday, June 25, 2013. (AP Photo/Keith Srakocic)

WASHINGTON – Sales of new 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 new home sales rose 2.1 per cent 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 per cent 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 per cent 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.

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