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New-home prices are falling, but flawed data have yet to show it.
WE'VE ALL HEARD IT FROM INDUSTRY ANAlysts and experts: Builders are slashing their prices. People are buying new homes for less than they paid a year ago. And builders are continuing to cut prices in 2007, trying to move their unsold inventory before prices fall even further.
There's just one problem with this line of thinking: The data don't show it. According to the U.S. Census Bureau, the median price of a new home has been increasing, from $249,400 in January to $254,000 in March, with the average sales price of a new home having jumped from $311,500 to $330,900 during the same period.
Yet industry experts have heard it from builders themselves that prices are coming down, says Dave Seiders, NAHB chief economist.
"About half the builders have been trimming prices, and that's from our latest survey," says Seiders, referring to the monthly question-and-answer sessions the NAHB conducts...