The economy's healthy fundamentals were also underscored by other data on Tuesday showing the biggest year-on-year increase in house prices in 2-1/2 years in February.
The Conference Board said its consumer confidence index fell to 120.3 this month from 124.9 in March, which was the highest reading since December 2000. Still, the index remained at a very high level even though consumers' assessments of current business and labor market conditions were less favorable than in March.
The dip in confidence is likely related to last month's failed attempt by Republicans in the House of Representatives to pass legislation to repeal the Affordable Care Act, the 2010 healthcare restructuring popularly known as Obamacare.
That failure stirred concerns in financial markets about the difficulties the Trump administration might have in implementing other policies, including its plan to cut taxes.
In a separate report, the Commerce Department said new home sales jumped 5.8 percent to a seasonally adjusted annual rate of 621,00 units last month, the highest level since July 2016. February's sales pace was revised down to 587,000 units from the previously reported 592,000 units.
New home sales were up 15.6 percent compared to March 2016. Economists polled by Reuters had forecast new home sales, which account for about 9.8 percent of overall home sales, slipping 0.8 percent to a pace of 583,000 units last month.
The US dollar hit a two-week high against the yen after the data. US stocks were trading sharply higher while prices of US government debt fell.
STRONG HOUSING MARKET
New home sales have now increased for three straight months. A tightening labor market, marked by a 4.5 percent unemployment rate, is boosting employment opportunities for young Americans and helping to support the housing market.
In addition, mortgage rates are low by historic standards. The 30-year fixed mortgage rate is currently averaging around a five-month low of 3.97 percent. New home sales are benefiting from a shortage of properties in the market for previously owned homes.
A report last Friday showed sales of existing homes surging 4.4 percent to a 10-year high in March. Housing market strength suggests that signs of a sharp moderation in economic growth in the first quarter are an aberration.
The Atlanta Federal Reserve is forecasting gross domestic product rising at a 0.5 percent annualized rate in the first quarter after increasing at a 2.1 percent pace in the final three months of 2016. The government will publish its advance first-quarter GDP estimate on Friday.
Last month, new single-family homes sales soared 25.8 percent in the Northeast region, reversing the prior month's 24.4 percent plunge. Sales jumped 16.7 percent in the West to their highest level since July 2007. They increased 1.6 percent in the South, but fell 4.5 percent in the Midwest.
The inventory of new homes on the market increased 1.1 percent to 268,000 units last month, the highest level since July 2009. Still, new housing stock remains less than half of what it was at its peak during the housing boom in 2006.
At March's sales pace it would take 5.2 months to clear the supply of houses on the market, down from 5.4 months in February. A six-month supply is viewed as a healthy balance between supply and demand.
A third report on Tuesday showed the S&P CoreLogic Case-Shiller composite index of house prices in 20 metropolitan areas rose 5.9 percent in February from a year ago, the largest gain since July 2014, after advancing 5.7 percent in January.