Sales of new U.S. single-family homes rose slightly in April, while fewer workers filed for first-time jobless aid last week, raising hopes the worst of the deep economic recession was likely over.
The Commerce Department said Thursday that new home sales climbed 0.3 percent in April from March to a 352,000 annual unit pace, while prices rose 3.7 percent, the biggest monthly advance since November.The inventory of homes available for sale in April fell 4.2 percent from the prior month to 297,000, the lowest level since May 2001. At April's sales pace, that represents a 10.1 months' supply, the smallest backlog in nine months.
Sales, however, were down 34 percent compared to April last year, a reminder of how steeply the market had been falling. The sales pace appears to have bottomed in January when it hit a record low 329,000 unit pace.
"Together they draw a picture that tells us that the housing market is finally bottoming out and that conditions are beginning to improve," said Bernard Baumohl, chief global economist at The Economic Outlook Group in Princeton.
Also, initial jobless claims dropped:
A separate report from the Labor Department showed initial claims for state unemployment insurance benefits dropped by 13,000 to 623,000 in the week ended May 23, a second straight weekly drop.
The reports were the latest in a series suggesting the intensity of the 17-month old downturn, characterized by severe job losses and plunging asset prices, was losing momentum and the economy could return to growth later this year.
"The data are consistent with the notion that the worst of the recession is behind us. We haven't hit bottom yet, but seem to be nearing it. ... I see positive growth in the fourth quarter," said Mark Vitner, a senior economist at Wachovia Securities in Charlotte, North Carolina.
SOURCE: Reuters via Forbes
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