WASHINGTON - Home buyers rushed to take advantage of government incentives and low mortgage rates in April, giving the housing market its biggest boost in five months.
Sales were up in all parts of the country except the West, where sales dropped by 6.2 percent from March.
The gains were led by a 21.1 percent jump in the Northeast and a 9.9 percent rise in the Midwest. Sales also rose 8.6 percent in the South.
But now that a home buyer tax credit has expired, growth in the second half of the year will depend on the lure of historically low mortgage rates and the strength of the economic recovery.
Some economists say mortgage rates alone won't be enough to propel the market.
"Although mortgage rates have fallen sharply, the combination of high unemployment, heavy indebtedness and tight credit suggest to us that demand will stumble," said Paul Dales, an economist at Capital Economics.
Sales of previously owned homes rose 7.6 percent to a seasonally adjusted annual rate of 5.77 million, the National Association of Realtors said Monday.
The increase in sales sparked a rise in home prices. The median price for a new home rose to $173,100, up 4 percent from a year ago.
Even with the rise in sales, the inventory of unsold homes increased in April to 4.04 million units. That would represent 8.4 months of supply of homes at the April sales pace.