USA Today
WASHINGTON (Reuters) — Sales of new homes rose 16.2% in April, sharpest climb in fourteen years, while prices fell a record 11%, according to a government report on Thursday that showed home builders taking extraordinary steps to move houses.
New single-family home sales rose to an annual rate of 981,000 units from a revised rate of 844,000 in March, the Commerce Department said.
The jump in sales was the biggest increase since a 16.4% surge in April 1993.
Analysts polled by Reuters were expecting April sales to rise to an 860,000 unit pace from a previously reported rate of 858,000 units in March.
In April, the median sales price of a new home — half sold for more, half for less — fell $28,500 to $229,100 from $257,600 in March. The big price decline indicated that builders are slashing prices to move a huge overhang of unsold homes.
There were 538,000 new homes for sale in April, a drop from the 546,000 reported in March. It would take 6.5 months to clear that inventory at the current sales pace, less than the 8.1 months recorded in March.
Thursday’s data comes a day ahead of another key report that measures the pace of sales for previously owned homes — which represent 85% of the housing market. AWhen that report is released Friday, analysts polled by Reuters expect April existing home sales to rise to a 6.14-million-unit pace from 6.12 million in March.
However, analysts cautioned against reading too much into the big gain, especially in light of other surveys showing that builder confidence has sunk in recent months over worries that troubles in the subprime mortgage market will further crimp demand.
There was also concern because all of the strength in sales came in one region of the country, the Northeast, which saw a surge of 43.1% from last April.
Sales were down 28.1% in the Midwest from April a year ago, and down 25.4% in the West. Sales fell a smaller 3.4% in the South.