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(AFP)

New US home sales edged up in April after two months of steep declines, but prices continued to fall amid the pandemic shutdowns, according to government data released Tuesday.

Sales last month rose 0.6 percent to a seasonally adjusted annual rate of 623,000, although the gain came after sales figures for March were revised lower, according to the Commerce Department report. 

The result far outpaced expectations, as the consensus among economists was for another steep drop in sales to 485,000.

While the figures show the result remains 6.2 percent below the pace seen in April 2019, they point to continued solid demand in the key US housing market. That demand could help the post-pandemic recovery once the economy fully reopens from the lockdowns imposed by COVID-19.

However, the data are subject to wild swings and large margins of error, so the real trend takes months to appear.

With potential buyers still reluctant to venture out, the median sales price fell for the second month to $309,900, a $17,000 drop from March, according to the report.

Sales in the West fell, but other regions posted modest increases.

The housing market is a key driver of US economic activity and has seen a steady rate of growth in recent years, aided by low lending rates and a solid job market. Low rates could help the post-pandemic recovery, but with close to 40 million people thrown out of work since mid-March, home sales could suffer further, analysts say.

“We expect only a modest recovery in home sales over the balance of 2020 as a slow recovery in the labor market and tight lending standards constrain the pace of activity,” analysts at Oxford Economics said.

Sales of existing homes plunged 17.8 percent in April, according to sales figures from National Association of Realtors last week. Those figures include apartments and townhomes.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.