Transcripts

Bargain Hunters Give New Home Sales A Much Needed Boost

SUSIE GHARIB: Some mixed news today about the U.S. housing market. The government said sales of new homes rebounded slightly last month, but a separate report indicated that home prices appear to be in a free-fall. The Standard & Poor's Case-Shiller home price index fell a record 14.4 percent in the first quarter, compared to year-ago levels. That's the biggest annual decline since the index began 10 years ago. Meanwhile, the Commerce Department reported sales of new homes rose 3.3 percent in April. That's the first sales increase in six months, following a revised drop of 11 percent in March. National Association of Home Builders' chief economist David Seiders says falling home prices are not enticing buyers.

DAVID SEIDERS, CHIEF ECONOMIST, NATIONAL ASSOCIATION OF HOME BUILDERS: The house price decline is really feeding the don't buy attitude rather than encouraging people to buy, because when prices are falling for some time, we know from history the general thing to do is expect them to fall further. So, until that psychology changes, it's going to be difficult to get those home sales turned around.

GHARIB: Las Vegas, Miami, and Phoenix have experienced the biggest home price declines. According to Case-Shiller, prices in all those cities are down around 25 percent.