Sales of new homes posted a surprising increase in September, although that may have been fueled by deep price cuts by builders struggling under a glut of unsold homes.
New homes sold at an annual pace of 1.08 million last month, the Census Bureau reported, up 5.3 percent from August. Economists surveyed by Briefing.com had forecast a reading of 1.05 million.
But the median price of a new home tumbled 9.7 percent from a year earlier to $217,100. And that measure of prices doesn't capture all the incentives such as free closing costs that builders have been offering to boost sales.
The number of completed new homes available for sale at the end of the period rose to a record 157,000.
A report Wednesday from the National Association of Realtors showed the sharpest year-over-year drop on record for median home prices. But a separate Census Bureau report earlier this month showed home builders having an unexpected increase in housing starts, and a survey of members by the National Association of Home Builders showed a small improvement in confidence, the first increase in that measure in a year, although those with a negative view of the new home market still outnumbered those with a positive view by a four-to-one margin.