WASHINGTON—Sales of newly built homes rebounded and prices rose briskly in April, a sign of rising demand that may spur builders to ramp up construction.
New-home sales climbed 6.8% from March to a seasonally adjusted annual rate of 517,000, the Commerce Department said Tuesday. So far this year, monthly sales have averaged 515,000, a pace that if sustained would mark the best since the first half of 2008.
Over the past year, new-home purchases are up 26.1%.
"The fact that new home sales have exceeded 500,000 in three of the four months so far this year is an encouraging sign that we are moving closer to 'normal,' " Stephen Stanley, chief economist at Amherst Pierpont Securities, said in a note to clients.
New-home sales reflect about one-tenth of all home purchases, and monthly estimates are often heavily revised as more data become available. The April figure has a margin for error of plus or minus 15.8%.
Other housing data have been mixed in recent months despite low mortgage rates and steady job creation. Bad weather may have dented traffic during the winter, and rising prices and the limited availability of homes have constrained the market.
For example, existing-home sales—the bulk of the market—declined 3.3% last month, the National Association of Realtors said Thursday, as the median sale price for a previously owned home was up 8.9% from a year earlier.
In another sign of rapidly rising prices, the Commerce Department on Tuesday said the median price of a new home sold in April stood at $ 297,300, up 8.3% from a year earlier.
The months' supply of new homes—reflecting how long it would take to exhaust all homes on the market at the April sales pace—fell to 4.8, well short of the 6-month mark many analysts consider a balanced market.
New-home sales peaked in July 2005, when they hit an annual pace of nearly 1.4 million. Sales bottomed out at 270,000 in February 2011 as the housing market crashed.
Figures so far from 2015 put sales closer to—but still short of—historical averages. From 1990 to 2000, for example, monthly new-home sales averaged 711,000.
A steady pickup in demand could prod builders to ramp up construction, which has been depressed since the housing crash. That, in turn, would boost hiring and demand for building materials.
The number of housing units started by builders rose 20.2% from a month earlier to a seasonally adjusted annual rate of 1.135 million in April, according to separate Commerce Department data released last week. That was the highest reading since November 2007.
But after years of slow progress, many economists and industry officials aren't expecting a big breakout for home sales or construction.
Woodside Homes, a closely held builder operating in five western and southern states, sold 453 homes in the first quarter, up 30% from a year earlier. Woodside Chief Executive Joel Shine described spring sales as "reasonably strong" rather than spectacular. He noted that job growth has remained strong and interest rates remain below 4%, with the expectation of an interest-rate increase later this year providing some with extra motivation to buy now.
"It's sort of been the recovery that never has gotten spectacular but doesn't go away either," Mr. Shine said. "Little by little, the economic trends and demographics trends are going our way."
Tuesday's report showed new-home sales rose 36.8% in the Midwest and 5.8% in the South, but fell 5.6% in the Northeast and 2.3% in the West.
—Kris Hudson contributed to this article.
Write to Jeffrey Sparshott at jeffrey.sparshott@wsj.com
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