Economists were expecting a 0.2% increase in new home sales for the month of April 2007. However sales increased by 16.2% which is the largest amount in 14 years.

The median sales price however was 11.1% lower than the month before. This appears to be a successful effort by builders to sell its excess inventories.

Now is a great time to buy, as new home prices are very low, however the lower prices of the new homes, do have a negative impact on those selling pre-owned homes, those that can least afford to reduce their prices.