In another sign of the ongoing recovery by the U.S. housing market, the Commerce Department released a report on Tuesday showing that new home sales rose by more than expected in the month of May.
The report said new home sales climbed 2.1 percent to a seasonally adjusted annual rate of 476,000 in May from the revised April rate of 466,000.
Economists had been expecting new home sales to edge up to an annual rate of 460,000 from the 454,000 originally reported for the previous month.
With the bigger than expected increase, new home sales reached their highest annual rate since July of 2008. New home sales were also up by 29 percent compared to the same month a year ago.
The monthly increase in new home sales was partly due to strong sales growth in the Midwest, where new home sales surged up by 40.7 percent to an annual rate of 83,000.
New home sales in the Northeast also jumped by 20.7 percent, while new home sales in the West increased by a more modest 3.6 percent. On the other hand, new home sales in the South fell by 9 percent.
The Commerce Department also said the median sales price of new houses sold in May was $263,900, down 3.2 percent from $272,600 in April but up 10.3 percent from $239,200 in the same month last year.
Inventories of new homes for sale climbed to 161,000 at the end of May from 157,000 at the end of April. The inventory level represents 4.1 months of supply at the current sales rate.
Last week, the National Association of Realtors released a separate report showing that existing home sales rose by much more than anticipated in the month of May.
NAR said existing home sales rose 4.2 percent to a seasonally adjusted annual rate of 5.18 million in May from 4.97 million in April. Economists had been expecting existing home sales to edge up to an annual rate of 5.0 million.
The bigger than expected increase lifted existing home sales to their highest annual rate since November of 2009, when sales spiked to 5.44 million in response to the home buyer tax credit.
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