The first look at home sales in the key month of July showed that sales came in better than expected.
According to the Census Bureau report, Americans bought newly constructed homes at a seasonally adjusted annual pace of 870,000 units.
That's 2.8 percent above the upwardly revised June rate and better than the consensus estimate of 830,000 that economists were expecting.
But the better sales numbers don't necessarily mean that the languishing housing market has bottomed out.
Economists say it's important to realize this is a survey that looks back to activity that is almost 2 months old — a time period before the current depths of the credit crunch. Since then, it's gotten a lot tougher to get financing for a home purchase for many people with less than perfect credit or less than 20 percent down. So it's likely that sales numbers will dip again in the coming months.
July sales are more than 10 percent below where they were a year ago and 37 percent below what they were at the peak of the market back in July 2005.
The median price of a new home sold during July was $239,500, up from the previous month and the previous year.
The supply of homes for sale ticked down slightly to 7.5 months; that's good news as the market approaches the six-month supply many analysts believe is needed to sustain the historic run-up in real estate prices.
The stock market will use this report to buoy the overall mood on Wall Street. Major indices saw a significant bump after the 10 a.m. release.
The market will now wait for Monday's release of the National Association of Realtors existing-home sales report. That shows how the biggest part of the home sales market — about 87 percent — performed.