AP / AP Home prices continuing to drop.

A curious report this morning from the U.S. Dept. of Commerce: New homes sales fell 0.6% in June from the month before. Why curious? Because all the numbers in the game changed.

Let’s talk units. The Commerce Dept. reports these sale numbers as a “seasonally adjusted annual rate,” which means that this is the number of new homes that are expected to sell for all of 2008, according to data for that month.

That rate in May, when reported last month, was 512,000. But we all know the government has huge margins of error. So the consensus was that sales were supposed to fall to a rate of 505,000 units in June, that from 512.

Okay, so the numbers hit the screen at 10 am, and we see sales in at 530,000 units, reported as down 0.6 percent. What?? May’s number was revised way up from 512,000 to 533,000, still a drop from April, but far less steep. So what does all this mean? It means that the number beat expectations by a lot more than we at first thought.

Does that mean that we’ve hit bottom? No. Why? Because like I just said, all these monthly numbers are constantly subject to revision. Until we start to see a real climb in new home sales for a good six months, we can’t say that we ever did hit bottom. Hindsight is of course 20/20, subject of course to revision.

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