NEW YORK (CNNMoney.com) -- New home sales soared in April as homebuyers rushed to claim the tax credit that expired at the end of the month.
New home sales climbed 14.8% to a seasonally adjusted rate of 504,000 last month, up from an upwardly revised 439,000 in March, the Census Bureau reported on Wednesday. Sales year-over-year were up 47.8%.
A consensus of economists surveyed by Briefing.com had expected April sales to rise to an annual rate of 425,000.
April was the second straight month of increases. In March new home sales snapped a four-month losing streak and surged at the fastest single-month rate in 47 years as homebuyers snatched up properties ahead of the looming deadline for the tax credit.
The homebuyer tax credit, which expired April 30, boosted sales since buyers had to sign contracts by the end of last month. First-time homebuyers qualified for a tax credit up to $8,000, while repeat buyers could get as much as a $6,500 break.
The credit also pushed existing home sales higher during the month, according to a real estate industry report released earlier this week.
"We got two solid increases in March and April," said Mark Vitner, senior economist at Wells Fargo. "We may see sales fall to a record low in the aftermath of the tax credit program, but any fallback should be short-lived."
That's because even with the jump, the current annual rate of new home sales is still historically low. Vitner said about 700,000 homes are sold annually in a stable economy.
"A true recovery in the housing market won't get underway until we see solid gains in employment and income," Vitner said.
Although last month employers added the most jobs since March 2006, Vitner said the labor market has a long way to go as it recovers the 8.4 million jobs that were lost in 2008 and 2009 and long-term unemployment sits at severe highs.
"The job market is getting a little bit better, but it's still abysmal, he said.
Price and inventory: The government report showed that the median price of new homes sold in April was $198,400, down almost 10% from March from April 2009.
Vitner said the drop in price is because first-time home buyers, who typically spend less than repeat buyers, represented a larger portion of overall buyers last month.
An estimated 211,000 new homes were for sale at the end of April. At the current sales pace, the government expects it will take five months to sell through that inventory. That's down from March, when there were 6.7 months of inventory on the market.