Calculated Risk – your one-stop shop for all housing-data-related analysis – has two long posts today on November's new home sales report. The market certainly treated the report as bullish: Treasuries are heading for their worst monthly peformance since April, and the yield on the benchmark 10-year note has risen to a six-week high of 4.65% in the wake of the data release.

Calculated Risk starts by rehearsing the numbers: November new home sales hit a seasonally-adusted rate of 1.047 million, and the numbers for August, September and October were all revised upwards as well. If you squint, you can almost see an upwards trend:

And prices, too, while not exactly rising don't really seem to be falling, either. The blue line is median prices, the red line the average:

After showing inventories of new homes high but declining, Calculated Risk then moves on to his second post, which shows that sales levels are still high by historical standards, with November 2006 beating all Novembers prior to 2002:

Calculated Risk thinks there's more downside, however:

Fannie Mae is currently estimating that sales for 2007 and 2008 will be at the 2002 level (about 975K units). I think sales will fall further, perhaps to the level of the 1998 through 2001 period, or about 900K units in 2007.

Whether we go back to 98-01 or merely to 02, however, the fact is that home sales will still be reasonably strong on an absolute level even if they're below the peak of the past few years. The economy was fine then, and it should be fine now.

UPDATE: James Hamilton notes:

When I suggested two months ago that we'd seen the worst for home sales, many or our readers responded with derisive skepticism. But so far, my analysis seems to be holding up. November now marks the fourth month in a row that home sales have come in above the value from last July. Another encouraging sign is that, whereas up to now the revisions of earlier months had always been toward more pessimism, today's news release revised upwards the estimates of home sales for August, September, and October.

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