New-Home Sales Rise 16.2% as Prices Decline
Sales of new homes surged in April as prices plummeted, indicating that builders are making huge concessions to entice buyers.</br></br>The Census Bureau said sales of newly constructed homes rose 16.2% last month to a seasonally adjusted annual rate of 981,000 homes, the largest monthly gain in 14 years and far exceeding economists' expectations. But the report also found that median prices tumbled 10.9% to $229,100 as builders offered deep discounts and other incentives.</br></br>"Aggressive sales techniques being employed by builders are now showing some success," David Seiders, chief economist at the National Association of Home Builders, said in a statement.</br></br>That is an encouraging sign, say some economists, because it suggests that demand for housing can be revived if prices fall in line with buyers' expectations. Still, economists aren't ready to say the market is on the mend.</br></br>"It could mean that we have hit bottom, but it's too early to make that call," said Patrick Newport, an economist at Global Insight Inc. "We need a couple more good months before we can say that things are turning around."