Sales of new single-family homes shot up nearly 24% in June to an annual rate of 330,000. The headline is impressive but it represents an exaggerated gain because home sales of the prior three months were revised down significantly. Sales of new single-family during May show a hefty 11% downward revision from the earlier estimate.
The good news is that the pickup in home sales during June has occurred after the first-time home buyer tax credit expired and the fact that sales of new homes in April were lower than previously estimated (422,000 vs. 446,000 in May report) suggests that fewer sales were borrowed from the future.
The median price of a new single-family home dropped 1.4% to $213,400 during June and is off 0.6% from a year ago. The median price of a new single-family home is down 18.7% from peak in March 2007 ($262,600). 
The historical average for inventories of unsold homes is 6.2-month supply. In June, there was a 7.6-month supply of unsold homes in the marketplace, down from 9.6-month supply in April. The combination of elevated inventories of homes and soft employment conditions bodes poorly for a near term housing market turnaround.
Homes are affordable given the historical low mortgage rates (chart 4) and desirable prices of homes. Until strong support from employment conditions materializes, the housing market's performance will be uneven and lackluster.
