U.S. new-home sales rose at fastest pace in 2 years

U.S. new-home sales rose at fastest pace in 2 years

June 25th, 2012 by Associated Press in Local - Breaking News

In this Wednesday, May 23, 2012, file photo, a new home still under construction is seen for sale in Springfield, Ill. Americans bought fewer homes in May than April, suggesting a modest recovery in the housing market could be choppy. The National Association of Realtors says sales of previously occupied homes dropped 1.5 percent in May to a seasonally adjusted annual rate of 4.55 million units.

Photo by Associated Press/Times Free Press.

MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON - Americans bought new homes in May at the fastest pace in more than two years, adding to evidence of a slow housing recovery.

The Commerce Department says sales of new homes increased 7.6 percent in May from April to a seasonally adjusted annual rate of 369,000 homes. That's the best pace since April 2010, the last month that buyers could qualify for a federal home-buying tax credit.

Sales are increasing despite a sluggish job market that has slowed other areas of the economy.

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 the National Association of Home Builders.