12:56 p.m.
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 the worst of the nation’s housing slump is over.
The Commerce Department reported that sales of new single-family homes jumped by 16.2 percent in April to a seasonally adjusted annual rate of 981,000 units. That was far better than the 0.2 percent gain economists had been expecting.
However, the median price of a new home sold last month fell to $229,100, a record 11.1 percent decline from the previous month. The big price decline indicated that builders are slashing prices in an effort to move a huge overhang of unsold homes.
The jump in sales was the biggest increase since a 16.4 percent surge in new home sales in April 1993.
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 in coming months.
The strength in sales was led by a 27.8 percent surge in the South. Sales also were up in the West by 8.5 percent and in the Northeast by 3.8 percent.
Sales fell in the Midwest, dropping by 4 percent.
The drop in median prices in April compared with March was a record one-month decline. If the April sales price was compared to the sales price a year ago, the decline was 10.9 percent, the biggest year-over-year drop since 1970.
In other economic news, the Commerce Department said orders to U.S. factories for big-ticket manufactured goods posted a moderate 0.6 percent increase in April, helped by a continued rebound in business investment.
In a third report, the Labor Department said the number of newly laid off workers filing applications for unemployment benefits rose to 311,000 last week, an increase of 15,000. Even with the gain, however, claims remain at a level indicating a healthy labor market.
Though the increase in orders for durable goods was less than had been expected, the government sharply revised the March performance to show a 5 percent surge, much stronger than the 3.7 percent gain previously reported.
Analysts say U.S. factories, which have been buffeted by the weakness in housing and slumping demand for autos, are starting to stage a moderate rebound, helped by reviving business interest in spending money to expand and modernize.
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