New-Home Sales Drop

New-home sales dropped 11.8% in April but remained above the 1 million mark for the 14th consecutive month.The U.S. Census Bureau reported that the sales of new single-family homes fell to a seasonally adjusted annual rate of 1.09 million in April from 1.24 million in March. The March number was revised upward by 6.4%. Mortgage Bankers Association chief economist Doug Duncan noted that the new-home sales numbers are very strong and very volatile and said he wouldn't jump to any conclusions based on one month's data. He pointed out that new-home sales are ahead of last year's pace by 6% and that the MBA's index of mortgage purchase applications hit a monthly record of 458 in April. "Our mortgage application data, which are a really good leading indicator of sales, says sales are remaining very strong," he said. He said he expects sales to slow later this summer, but he is forecasting that 2004 sales will come in slightly above last year's record of 1.09 million in new-home sales.