A little more good economic news this morning.

New home sales rose from an annual rate of 322,000 in January to 337,000 in February. Though this represents a 4.7% month over month increase it’s important to keep in mind that this is still an abysmally low number of sales. In fact, it is the second slowest month on record, January having been the slowest. Inventory declined from 12.7 months to 12.2 months. A very weak new home sales report but at least it isn’t getting worse — so far.

On the other hand durable goods orders were a very nice surprise. Excluding transportation orders rose 3.9% in February. Orders for machinery were up 13.5%. Despite the nice increase, it’s necessary to note that orders are down 28.4% from February last year. Also keep in mind that these numbers are subject to revision. Still, this is the first time in six months that orders have increased month over month.

There is a lot of talk in Phoenix that existing home sales are going to be exceptional in March. I heard a number of 11,000 homes in escrow. Assuming that they close, that would more than double the sales volume of the past few months. In fact, it would be back to bubble sales levels.

I don’t know if it’s just realtors talking their book or some other factor. If true, some of the increase could come from banks blowing out inventory via auctions. Nevertheless, it might be another sign that some confidence is creeping back into the housing market.

We’re now working on several weeks of economic data that indicate a leveling off in the rate of economic decline. That doesn’t necessarily mean it picks up from here but you do have to stop getting worse before you start getting better. One can hope that may be the case.

I won’t tell you that I feel more confident about my belief in a second half bounce of decent proportions, maybe I just feel a little less naked.

more: here and here