Durable goods orders rose in April by the most in five months, and Americans bought new homes at a record pace, suggesting that both business and consumer spending are supporting American economic growth.

The 1.9% rise in orders was the first increase this year, the Commerce Department said yesterday in Washington. Sales of new homes rose 0.2% to a 1.316 million annual rate from a 1.313 million pace in March that was less than the government first reported, the department also said.

“We still have good support from consumers and I think businesses will be investing actively,” said Michael Moran, chief economist at Daiwa Securities America in New York, who predicted a 2% increase in durable goods orders. “We should do reasonably well in the second quarter.”

Orders for business equipment increased by the most in three months and sales of capital goods rose, a sign such investment will bolster the economy this quarter. Yesterday’s rise in new home sales comes one day after a report showed demand surged for existing homes last month, pushing the median sales price above $200,000 for the first time.

Job gains and low interest rates are fueling the housing demand and helping consumers spend. Businesses are responding by replacing outmoded trucks, machinery, and computers to meet demand, economists said.

The increase in orders for durable goods – expensive items made to last at least three years – followed a 1.6% decline in March that was better than the government previously reported. Lower defense bookings led to an unexpected 0.2% drop in orders excluding transportation equipment.

Economists expected durables orders to rise 1.3% to $197.6 billion, based on the median of 66 forecasts in a Bloomberg News survey, after a previously reported 2.3% decline in March. Orders excluding transportation were forecast to rise 1% after a 0.2% increase in March that the government previously reported as a 0.5% decline.

Economists predicted new homes would sell at a 1.325 million sales rate in April after March’s previously reported 1.431 million pace, according to the median estimate. The median price rose to $230,800 in April from $217,500 a month earlier. The median price is up 3.8% from the year-earlier month.

“I don’t think we’re anywhere close to seeing the housing market weaken,” said Mark Vitner, senior economist at Wachovia. “All the conditions are still very favorable: we’ve got stronger job and income growth; we’ve got the lowest interest rates in a generation.”

Orders for transportation equipment rose 8.2% after falling 6.5% in March.

Bookings for motor vehicles increased 3.4% and aircraft orders surged 28% after slumping 22% the previous month.

Orders for defense hardware plunged 15% last month, following an 8.3% increase a month earlier. Excluding defense, orders in April rose 2.3%.

Much of the volatility in durables orders stems from fluctuations in big-ticket civilian aircraft orders that account for only about 3% of the total. Boeing, the world’s second-largest commercial aircraft maker, after Airbus SAS, said it received 14 plane orders last month, up from 11 in March.

Machinery orders increased 2.2% last month after falling in March and orders for computers rose 16% after a 5.3% decline.

Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, rose 1.6% last month, the most since January. Shipments, which the government uses to construct quarterly gross domestic product figures, increased 1.1% after no change in March, initially reported as a 0.8% decline.

Yesterday’s report is “broadly consistent with the notion that the manufacturing sector is still growing, but not growing as fast as it was six months ago,” said Dana Johnson, chief economist for Comerica Bank in Detroit, in an interview.

The revisions to March shipments suggest business investment will be revised higher when the government updates its estimate of first-quarter gross domestic product tomorrow. Before today’s statistics, economists projected a 3.6% rate of growth for the quarter, up from the government’s initial estimate of 3.1 percent.

“The outlook for capital spending is pretty constructive,” said David Resler, chief economist at Nomura Securities International in New York. Because of the revisions to March, “we may get more of an upward revision to GDP than the 3.6 percent I’m expecting,” he said. “I wouldn’t be surprised if it goes to 3.7% or 3.8%.”

Fed Chairman Alan Greenspan last week said that while there is “a little froth” in the U.S. housing market, there is no sign of a national bubble that might harm the economy.

Home sales so far this year have averaged a 1.27 million rate, compared with last year’s record 1.2 million. As job growth, rising incomes, and mortgage rates within a percentage point of a four-decade low fuel home sales, construction will keep adding to economic growth in coming months, economists said. Data yesterday showed record purchases of previously owned homes.

“We think sales can be sustained at this level,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, N.Y. “Housing is not quite tapped out as a source of incremental growth, though we don’t expect sales to rise much further through the second half.”

New home sales account for about 15% of the residential real estate market. Sales of previously owned homes, which rose 4.5% to a 7.18 million annual rate in April, make up the rest.

“The demand is good in virtually all parts of the country,” said Donald Tomnitz, chief executive at D.R. Horton, in an interview. D.R. Horton is the largest U.S. homebuilder by market value. Home construction added 0.32 percentage point to the economy in the first quarter, which grew at a 3.2% annual rate, the Commerce Department said on April 28.

Sales rose in two of the four regions in April. Sales surged 37.2% in the Northeast to 107,000 and rose 2.8% in the West to 368,000. They fell 5.3% in the South to 630,000 and declined 0.5% in the Midwest to 211,000.

“Interest rates are still very, very low, and builders are doing very well,” said William Emerson, chief executive officer of Quicken Loans Inc., an online mortgage lender, in an interview. “There’s still a high demand for housing.”