New Home Sales Surge in April
Sales of new single-family homes jumped 16.2 percent in April, the largest increase in 14 years, but the median price fell 11.1 percent, marking the largest one-month decline on record, according to the Commerce Department.
Analysts regarded the mixed signals cautiously, saying that troubles in the subprime market could further crimp demand in coming months.
''What you're seeing is the blue-light special,'' says Pat McPherron, an economist with Moody's Economy.com. ''The only way this market is going to move is by price cutting.''
The strength in new-home sales was led by a 27.8 percent increase in the South. Sales were also up in the West by 8.5 percent and in the Northeast by 3.8 percent. In the Midwest, sales fell 4 percent. Meanwhile, April's median new-home price of $229,100 made the record books as the largest-ever month-over-month decline, as well as the biggest year-over-year drop (10.9 percent) since 1970.
Source: The New York Times (05/25/07)