Housing market recovery gains traction with rising sales, prices

WASHINGTON, Wed May 23, 2012 – The U.S. spring home-selling season got off to a strong start in April with rising sales and prices providing evidence that a housing market recovery was gaining some traction.

The housing sector has been the Achilles’ heel of the economy ever since the home-price bubble burst.

Data this week, however, have painted a relatively upbeat picture for the market and underscored the economy’s resilience.

“The recent buoyancy in housing market activity has raised hopes that this beleaguered sector may finally be on the verge of a rebound,” said Millan Mulraine, senior macro strategist at TD Securities in New York.

New home sales increased 3.3 percent to a seasonally adjusted 343,000-unit annual rate, the Commerce Department said on Wednesday. Compared to April last year, sales were up 9.9 percent.

The report came on the heels of news on Tuesday that home resales hit a two-year high, with the sector getting support from investors who are increasingly seeing value.

Even more encouraging, the median price for both new and previously owned homes surged last month, a further sign of life for a market that has struggled to come back from its 2006 collapse.

The improving tone could be a boon for President Barack Obama whose housing policies have been decried for doing too little to help distressed homeowners.