WASHINGTON (AP) — Sales of new U.S. homes increased 4.5% in March, the third straight monthly gain as the housing market appears to be cautiously recovering from a mortgage rate spike last year that caused homebuying to slump. 

The Commerce Department says that new homes sold at a seasonally adjusted annual rate of 692,000 in March, up from 662,000 in February. For the first three months of 2019, new-home sales are 1.7% higher than the same period a year ago.

March's sales pace was the strongest since November 2017, a sign that the market is building some momentum. New-home sales began to rebound after the average 30-year mortgage rate fell from its recent peak of 5% in November 2018.

The median sales price of a new home in February tumbled 9.7% to $302,700.