Why Monday's housing numbers are meaningless

Early Monday morning, the Census Bureau announced that new home sales surged 11 percent in June compared with a month earlier [pdf], outpacing most economists' estimates and leading to a orgy of enthusiastic news coverage. But did sales really climb?

The press certainly thinks so. Bloomberg News reported that the data provide "evidence that the deepest housing slump since the Great Depression is starting to stabilize," while the Associated Press said it was "another sign the housing market is finally bouncing back from the worst downturn in decades." And so on.

Unfortunately, it's not that simple.