New U.S. single-family home sales rose more than expected in April and the median price surged, suggesting the housing market recovery was gaining traction.
The Commerce Department said on Tuesday sales increased 6.8 percent to a seasonally adjusted annual rate of 517,000 units. March's sales pace was revised up to 484,000 units from the previously reported 481,000 units.
Economists polled by Reuters had forecast new home sales, which account for 9.3 percent of the market, rising to a 510,000-unit pace last month.
The upbeat report added to housing starts data in indicating that housing was gaining momentum after treading water for much of last year. Economists believe housing will take the baton from a lethargic manufacturing sector and help to drive economic growth this year.