Economists expected April’s new-home sales to rise 4.6%. Boy, did they get a surprise.

According to data released Wednesday morning by the U.S. Census Bureau, new-home sales skyrocketed 14.8% as buyers rushed to nab a federal housing tax credit that expired April 30. All that buying translated into a new-home sales pace of 504,000 units in April, which is the strongest performance in two years. On an annual basis, April’s activity stands 47.8% above the same month a year ago.

The spike in sales has left builders with ever-shrinking inventories. According to Census estimates, there were 211,000 new homes for sale last month, or a five-month supply at current sales levels. 

Builders may need to—cautiously—rebuild those inventories. While the pace of single-family permits dropped 10.7% in April, industry watchers believe the market may be turning, even as the threat of a double-dip in home prices continues to loom.

“It is impossible to determine how much of the recent increase in new home sales is related to the second homebuyer's tax credit and how much is related to an improving economy,” noted Patrick Newport, U.S. economist for IHS Global Insight. “But the fact that 25% of new homes sold in April had not been started, and another 30% were under construction—and the likelihood that many of these homes will not be completed by June 30, the date the transaction must close to qualify for the tax credit—is a sign that many new homes are being bought by people who want to live in new homes, not by individuals looking to take advantage of a tax credit.”

Michael Rehaut, an analyst with J.P. Morgan, agreed. “While we believe April was clearly boosted by the then upcoming expiration of the federal housing tax credit, we nonetheless believe that the overall housing market continues to stabilize and improve,” he said in a research note.

Builders are a long way from any pricing power, however. The median sales price for a new home in April was $198,400, which is still more costly than the competition: existing homes, which had a median price of $173,100 in April, according to the National Association of Realtors.

Alison Rice is senior editor, online, at BUILDER magazine.