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New Home Prices Rise to Five-Year High

Stockbyte/Thinkstock(NEW YORK) -- New home sales last month stayed almost even with July at 373,000, the Commerce Department reported on Wednesday.  But in more promising news for the housing market, the median price of a new home jumped to a five-year high.

The average price of a new home rose by 11.2 percent in August to $256,900, marking the highest tally since March 2007.

David Crowe, chief economist with the National Association of Home Builders, says there are reasons for confidence about the housing market.

"Housing starts, housing sales, existing home sales, house prices, builder confidence.  It's a series of good pieces of news that lead us to believe we're really on a road to recovery," he says.

But while recovery continues to head in the right direction -- new home sales in August were up nearly 28 percent compared with the year before -- there's still a long way to go for a healthy real estate market.

"We're a long way off from a normal market or a typical market.  That should be more in the 800,000 to 900,000 per year sales range so we're not even half way back to normal.  But the encouraging thing is that we continue to increase," Crowe says.

Copyright 2012 ABC News Radio

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