COMMERCE DEPARMENT REPORTS SALES

On June 25, the Commerce Department reported that sales of new homes had risen by 7.6% in May, compared to April, and by 20% compared to sales in May 2011, to a "seasonally adjusted" annual rate of 369,000.  This figure, if sustained, contrasts with 2011's disastrous 306,000 new home sales.  Still more hopeful, in terms of a turnaround, Commerce reported that new home prices increased 5.6% year over year, and that unsold inventories had fallen to a 4.7 months' supply; a six-month supply is considered "stable."  Some analysts are willing to call a bottom:  "Yet another data point that supports our view that housing is in a moderate recovery phase," states one.  "We expect new home sales to continue to trend higher in the coming months," ventures another.  Another points out, "New-home sales are about 55% below a healthy level of 850,000, and at the recent rate of improvement it would take more than seven years to return to that point."

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