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Another dismal report on the U.S. housing market is actually having little impact on stocks, with major indexes down only slightly in late morning trading on Wednesday. New home sales fell 12.6 per cent in July, which was far worse than expectations. The report follows a look at existing home sales on Tuesday. Sales fell 27 per cent month-over-month and roiled investor sentiment.

A number of bloggers have added some context to these numbers. As The Economist's Free Exchange blogger pointed out, the actual monthly numbers for July new home sales (that is, not seasonally adjusted) were just 25,000.

"When one takes into account that sales aren't spread evenly around the country - most are taking place in tighter markets experiencing job growth - it becomes clear that in some metropolitan areas housing markets have all but shut down," the blogger said. "And this despite 30-year mortgage rates around 4 per cent."

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As well, Bespoke Investment Group has constructed an interesting chart showing new home sales as a percentage of the U.S. population, which takes into account the growing potential for new homes since the early sixties. Even though the population is much larger now, the sale of new homes is still at a record low. Scary stuff.

Weird thing is, Toll Brothers Inc. somehow managed to make a profit in this environment, and the shares have risen on Wednesday as investors digest the luxury home builder's latest quarterly results. Toll Brothers returned to profitability (well, with the help of a tax benefit) after a string of quarterly losses extending back to 2007.

Even weirder, other home builder stocks are also moving higher. The S&P 500's homebuilder index rose about 2 per cent, with Lennar Corp. up 1.4 per cent.

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