Home-Sales Data Paint Fuzzy Picture

Updated from 1:11 p.m. EDT

New-home sales unexpectedly surged 16% in April, and inventories dropped, signaling that the key spring selling season may not be a total disaster for homebuilders.

While the data provided some optimism that the ongoing housing downturn finally may be showing signs of abating, industry watchers pointed out that the volatile monthly sales numbers can be misleading and don't necessarily signal a turnaround.

Moreover, the report came on the same day that luxury homebuilder Toll Brothers(TOL Quote) posted disappointing earnings and said the U.S. real estate market generally remains soft.

Sales of new one-family houses in April came in at a seasonally adjusted annual rate of 981,000 units, the U.S. Census Bureau said. That was up from the downwardly revised rate of 844,000 in March, but down 10.6% from a year earlier.

Economists expected an annual sales rate of 860,000 homes in April, according to Reuters.

"It's definitely a surprise," says Adam York, an economic analyst with Wachovia. "It's the biggest rise since 1993. Certainly a lot higher than most of us were expecting."

In a research note, Bank of America analyst Daniel Oppenheim said the data likely overstated the April sales increase. The issue boils down to the fact that the government doesn't take cancellations of sales contracts into account.