Big month-to-month swings are common for new home sales, evident in August's results where a 675,000 annual rate came in right at the bottom end of Econoday's consensus range. An offset, however, is a big upward revision to July from an initial 714,000 rate to 739,000 which is the best showing since February last year.

Staying on July, this month's median price of $436,600 was up 4.8 percent compared to June amid strong demand as buyers turned to new homes given lack of available properties in the resale market. The median for August, however, fell 1.4 percent to a a still favorable $430,300. Both of these months are the best since early in the year though are well down from a nearly $500,000 peak in October last year.

Still rising mortgage rates are likely to hold down new home sales in September though the housing market has shown some resistance to high financing costs. These results together with a lower-than-expected consumer confidence index also released at 10:00 ET leave Econoday's Relative Performance Index at minus 11 to indicate that recent US economic data on net are coming in just below consensus forecasts.

New home sales rose from 697,000 in June to a 714,000 annual rate in July with forecasters calling for modest slowing in August back to a 699,000 rate.

New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.

This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as new home sales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio. Each time the construction of a new home begins, it translates to more construction jobs, and income which will be pumped back into the economy. Once the home is sold, it generates revenues for the home builder and the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items new home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, new home sales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the new home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.