New home sales fall by more than forecast as prices surge

Sales of new U.S. homes declined in April by more than forecast as higher prices limited demand, while construction backlogs continued to build.

Purchases of new single-family homes fell 5.9% to a 863,000 annualized pace following a downwardly revised 917,000 in March, government data showed Tuesday. The median estimate in a Bloomberg survey of economists called for a 950,000 rate.

A jump in building materials costs is contributing to higher prices, a headwind for an otherwise robust housing market. While elevated prices are acting as brake on demand, mortgage rates near historic lows and elevated backlogs suggest steady residential construction gains in coming months that will help contribute

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