Economist Michael Feroli of JPMorgan Chase sees a bit of good news in the housing market:
New home sales rose 3.3% in April to an annual rate of 526,000. Although last month's increase was the first since October of last year, the level remains quite low and is 8.0% below the sales pace of just two months prior. Progress is being made on inventories, but very slowly. Unsold new homes declined 11,000 to 456,000 but remain well above the 300,000 range which prevailed before the housing boom. At last month's sales rate, the months' supply of new homes for sale was 10.6.
The econ team over at First Trust Advisers also sees some light at the end of the tunnel:
Although there is more pain ahead, today's report on new home sales shows the correction in home building is starting to bring the sector back toward normalcy. New homes were sold at a 526,000 annual rate in April, which was better than the consensus expected. More importantly, the inventory of unsold new homes continues to drop. Total inventories have dropped for eight straight months. Meanwhile, the number of unsold completed new homes—a key factor behind future construction and price changes—peaked in January at 199,000 and is now down to 181,000. The 18,000 decline in only three months is the fastest reduction on record.