August 24, 2005, Wall Street Journal — Sales of new homes skyrocketed 6.5% to a record high in July, according to a separate Commerce Department report that trumped economists’ expectations. Following on the heels of a drop in pre-owned home sales and other signs of a slowdown in the housing market, the big jump in new-home sales might seem to be a sign of the umpteenth revival of the housing boom. And new-home sales could be a leading indicator of the housing market’s broader health. But new-home sales are also a decidedly small part of the total market, and these numbers, as with durable goods, are typically volatile. “In both cases, the huge swings appeared to reflect volatility rather than a meaningful change in the underlying trend,” UBS economists said. One trend may be developing, though: new-home prices fell last month for the third month in a row and are down 11% from a record high hit earlier this year.
The Afternoon Report [WSJ - 2nd Item]