As usual, yesterday's New Home Sales numbers were greeted with a range of cheers and derision, as analysts saw in them what they hoped and expected to see.

Among the more objective points about the numbers, meanwhile, were the following:

The sales numbers were better than expected, as has been most housing data of late

Inventories are now approaching normal levels, which should help stabilize prices

Prices are still falling, but at a much slower rate

Sales were no doubt helped by low mortgage rates, the $8,000 first-time homebuyer credit, and major incentives from homebuilders, some of which will eventually cease

The housing market is, slowly but surely, healing itself.

Here are some charts and key observations from Asha Bangalore at Northern Trust. They help put everything in context.

First, new home sales improved again. Of course, they're still near historical lows.

Sales of new single-family homes rose 9.6% in July, after upward revisions for May and June. Purchases of new homes have risen in five of the first seven months of the year. Sales of new single-family homes are now up roughly 32% from a record low reading of 329,000 units registered in January 2009.

The rate of sales is also falling at a much slower rate (year over year).

Prices are now falling at a much slower rate.

From a year ago, sales of new single-family homes are down only 9.3%; it is a significant improvement compared with double digit declines seen in recent months. The largest drop in the median price of a new single-family home for the cycle was in January 2009 (-45.5%).

The median price of a new single-family home was $210,100 in July, down 0.1% from prior month and off by 11.5% from a year ago.

Inventories have now almost reached the "normal" level. This bodes well for price stabilization.

The inventories-sales ratio is encouraging because it declined to a 7.5-month mark, down from a cycle high of 12.4-months in January 2009 (see chart 4). The median of this ratio during 1963-2000 is 6-month supply.







