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ew US single-family home sales surged to a three-year high in April, with builders offering discounts and incentives to attract buyers. However, rising mortgage rates and economic uncertainty continue to weigh on the housing market.

    According to data from the Commerce Department's Census Bureau, new home sales jumped 10.9% to a seasonally adjusted annual rate of 743,000 units last month. Economists had forecast a decline in sales to 693,000 units. The median new house price dropped 2.0% to $407,200 in April from a year earlier.

    Builders are cutting prices to remain competitive, with the National Association of Homebuilders reporting that the share of builders offering discounts is at its highest level in nearly 1-1/2 years. However, economists warn that weaker economic growth and rising mortgage rates will continue to dampen demand for new homes.

    Mortgage rates have increased to a three-month high, averaging 6.86% this week, according to Freddie Mac data. The yield on the benchmark 10-year US Treasury note has also risen due to concerns over the Trump administration's policies and the nation's fiscal outlook.

    The inventory of new homes dipped 0.6% to 504,000 units in April, but remains near levels last seen in late 2007. With a supply of previously owned homes at its highest level in more than four years, the outlook for new construction is dim. Economists predict that housing starts will decline further, shifting demand away from the new home market over the next few years.