Monthly Housing Sales Jump

But prices are way, way down
By J. Kelman
Posted May 24, 2007 2:15 PM CDT
Monthly Housing Sales Jump
Construction workers work on the structure of new townhomes in Davenport, Fla., Wednesday, May 23, 2007. Sales of new homes surged in April by the biggest amount in 14 years, but the median price of a new home dropped by the largest amount on record. The mixed signals left no clear picture of whether...   (Associated Press)

The real estate market had a volatile April, with home sales rising at their fastest rate in 14 years. But the 16% spike in sales over the previous month hid a more complicated reality: New home prices dropped by a record 11%, according to Commerce Department figures released today, and builder confidence remains low.

Moreover, economists, who had predicted a minuscule 0.2% bump, caution that month-to-month figures are notoriously unreliable. "One big monthly change, in either direction, does not make a trend," cautions one economist in the Wall Street Journal, noting that the margin of error on the numbers is 13%—nearly enough to erase the gains. (More housing market stories.)

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