Fed officials concerned about a stagnating US housing market may feel more encouraged.
New home sales in the US soared 18.6 per cent to an annualised pace of 504,000 units in May, as warmer weather and rising supply of homes.
Economists had expected new home sales to rise to 439,000 from a revised reading of 425,000 a month earlier.
The figures come a day after the National Association of Realtors said the volume of existing home sales climbed 4.9 per cent to a 4.89m annualised pace in May, the fastest pace since last October.
The mild recovery in the US housing market has weighed on several Federal Reserve policymakers. Chair Janet Yellen warned in May that the pace of activity could pose a risk to the prospect of faster growth if it doesn’t pick up.
The cold winter was blamed for much of the weakness, as homebuilders were forced to delay construction ahead of the busy spring buying season.
US equity markets remained marginally lower following the report.
American consumers appear to have put the economy’s first-quarter struggle behind them.
Consumer confidence climbed to its highest level since before the financial crisis in June, the Conference Board said on Tuesday. Its index rose to 85.2 from 83 in May.
Economists had forecast the index would climb to 83.5
A brightening jobs market and rising house prices have helped underpin the confidence of American consumers even as wider growth stalled in the first quarter.
The Conference Board’s index touched a low of 25.3 in February 2009 in the wake of the financial crisis.
The rise in confidence as measured by the Conference Board this month contrasts with a rival survey from Thomson Reuters and the University of Michigan which showed confidence dipped.