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WASHINGTON (AP) – Sales of new homes rose in May to the fastest pace in five years, a solid gain that added to signs of a steadily improving housing market.

The Commerce Department says new home sales rose 2.1 percent last month compared with April to a seasonally adjusted annual rate of 476,000, the highest level since July 2008.

The median price of a new home sold in May was $263,900, up 3.3 percent from a year ago.

Sales of new homes remain below the 700,000 annual pace that’s considered healthy by most economists. But the pace has increased 29 percent from a year ago.

Analysts say the housing recovery is looking more sustainable and should continue to boost economic growth this year, offsetting some drag from higher taxes and federal spending cuts.

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