Purchases of new single-family homes increased nearly 11% last month to a 743,000 annual rate, according to government data released Friday. The median estimate in a Bloomberg survey of economists was a 695,000 pace.

The gain indicates that the new-homes market is holding up better than the resale market, reflecting the ability of builders to cut prices and offer sales incentives. Sales of previously owned homes have been lackluster even as more homeowners list their properties.

The April figure on new homes also suggests that sales stabilized after a weak first quarter, as the previous three months were revised down.

The median sales price decreased 2% from a year ago to $407,200, reflecting greater activity in more moderately priced homes. On an annual basis, prices have largely been retreating over the past 12 months. 

Builders are also helping out on that front, as 34% reported cutting prices this month. That was the largest share since December 2023, according to recent data from the National Association of Home Builders.

However, prospects for the residential real estate market this year remain clouded due to persistent affordability challenges that include mortgage rates hovering near 7%. Moreover, consumer anxiety about finances and the employment outlook is building in the wake of higher tariffs, leaving many prospective buyers sidelined.

--With assistance from Chris Middleton.