Sales of new homes rose in April rose nearly 30 percent compared with a year ago, according a to a report by the Commerce Department.
This is the latest evidence of a recovering housing market, six years after the housing bubble burst leading to a recession.
Home prices are also rising but have yet to get back to the highs seen during the bubble.
The median price of a new home sold in April was $271,600 - adjusted for inflation this price is still below the price of a new home during the boom.
"We're now about half-way back to what could be considered a full recovery," National Association of Home Builders Senior Economist Robert Denk said in a note.
Today's report also shows new home sales in the past four months were better than previously reported.
At the current sales rate, there is just over four months' supply of new homes for sale. A six-month supply is considered healthy. This means that there is pent up demand for new construction.
The housing recovery is being helped by the Federal Reserve's efforts and some economists fear that homes may not seem as cheap once those efforts wane.
For now though the market seems to be inching toward normalcy.
Economists with IHS Global Insights do not expect the housing market to get truly back to normal until 2015.
New homes make up a small chunk of the housing market, but have an important ripple effect on the economy as new appliances and furnishings are needed.
Home are also often Americans' biggest investment, and a rise in prices makes Americans more confident in their finances and ability to spend.
A separate report from the Department of Labor today showed jobless claims dropping for the week.
The number of people applying for unemployment benefits fell 23,000 to a level consistent with solid job growth.
The four-week average of those applying for unemployment benefits ticked down just 500 to 339,500. These claims figures are one indicator of a strengthening job market.
The jobs market still has a ways to go, employers need to add thousands more jobs to significantly bring the unemployment rate down.
The housing recovery though is playing its part in the job market, the demand for new construction means there will be more jobs created in this sector.
Housing is one part of the massive U.S. economy. To have a truly convincing recovery there needs to be similarly good news from other parts of the economy.