-->New home sales jumped a surprising 13% in October to a much stronger-than-expected annual rate of 1.424 million. Sales in the Northeast and West saw spectacular 40%-plus gains.

As sales rose, supply on the market fell to 4.3 months from 4.7 months. The median price rose 1.6% in the month to $231,300 but is still only up 0.9% on the year (note that price data were revised higher due to prior reporting errors). The median price of an existing home, data issued yesterday, is up a much sharper 16.3% on the year.

The data are exceptionally strong and may renew talk of a housing bubble. Together with a strong consumer confidence report, bonds were weakening and the dollar firming Tuesday morning. Higher interest rates, now at 6.25% for 30-year loans, were supposed to cut into housing strength as they appeared to do in yesterday's existing home sales data. Next data on the housing market will be construction spending for October on Thursday.