Sales of new U.S. homes rose solidly last month, the government reported Wednesday, adding to evidence of gradual improvement in the weak housing market. The Commerce Department said sales increased 3.3 percent in April to an annual rate of 343,000. New-home sales fell 7.3 percent in March. Compared to April last year, new-home sales were up 9.9 percent, but despite the gain, sales are well below the 700,000 annual sales that economists consider healthy. The housing market continues to be limited by an oversupply of used homes, especially from foreclosures, many of which sell well below their market value. Despite the weakness in the housing market, the median price of a new home rose 0.7 percent in April and was up 4.9 percent from a year earlier. Wednesday's report came one day after an industry group reported that sales of previously owned homes hit a two-year high in April. The two reports suggested the housing-market recovery was gaining momentum.
