New Home Sales Rise to 2010 Levels

The pace and price of new home sales increased in November, though sales rates remain less than half of historically healthy levels.

The pace of new home sales shot up 4.4 percent in November to a two-and-a-half-year high, as the housing market recovery builds toward 2013.

Sales of new homes increased to an annual rate of 377,000 in November, according to the Commerce Department, the highest level since April 2010, when demand was inflated by a temporary tax credit.

In the boom years before the recession, new-home sales reached as high as 1.28 million annually. If the economy were fully recovered, analysts say, sales of new homes could top 1.5 million a year because of all the pent-up demand.

The supply of new homes available for purchase on the U.S. market dropped to 4.7 months at the current sales pace from 4.9 months in October.

Sales are now 15.3 percent higher compared to one year ago, though they remain quite low by historical standards. Buyers were especially active in the South, where November's sales gained 21.1 percent, and sales also rose in the Northeast by 12.5 percent. Sales in the West fell by 17.8 percent, and by 12.5 percent in the Midwest.

The median price of new homes also climbed 3.7 percent to $246,200, up from $237,500 in October. Seasonally adjusted prices are 14.9 percent higher compared to one year ago.