U.S. new home sales fell marginally in June but the pace was much higher than expected due to +50k of revisions over the past three months. Economists were surprised by the report and said it may be a tentative sign of stabilization, though more data will be needed to confirm that.

Sal Guatieri, senior economist at BMO Capital Markets, said the report "paints a brighter picture (than previously portrayed), in the new housing market anyway." Yet he cautioned against being too optimistic, as things are still getting worse but only at a slower decline than in the past two years.

New home sales fell for the seventh of the past eight months in June, falling by 0.6% to an annual pace of 530k sales. This rate is much higher than consensus expectations due to major revisions in the previous two months, according to the U.S. Census Bureau on Friday.

The final consumer sentiment survey from Reuters and the University of Michigan received a large upward revision from preliminary estimates in July, with the headline indicator coming in at 61.2 compared to the preliminary 56.6 level.

U.S. home foreclosures soared by 121% in second- quarter year-over-year results, according to a report issued by RealtyTrac.

There were 739,714 foreclosure filings in the second quarter of 2008, a 14% quarterly increase. According to RealtyTrac, 48 of 50 states and 95 of 100 of the largest metropolitan areas experienced year-over-year increases in foreclosure activity in the second quarter.

In May, the New Home Sales Index fell 2.5% to its second-lowest pace in 17 years, and economists expect another decline in the June report to be released Friday by the U.S. Census Bureau.

The index of sales has fallen in six of the past seven months and currently stands at an annual pace of 512k. The consensus looks for a 1.8% decline to a pace of 503k sales in June, but the range of forecasts varies from a low of 480k to a high of 530k.

Friday's highlights include the release of U.S. durable goods and new home sales for June along with a final look at consumer sentiment for the United States. There are no major scheduled macroeconomic releases or events for Canada.

At 8:30 a.m. EDT, the U.S. Commerce Department will release durable goods orders for June. Economists expect a 0.3% month-over-month decline...

The Miami Herald's investigative team reported on Sunday that the state has approved over 10,000 mortgage broker licenses for convicted felons since 2000; over 4,000 were issued to individuals who had been convicted of crimes such as fraud, extortion, racketeering, and bank robbery – crimes that are specifically prohibited by the licensing statute...

New York Attorney General Andrew Cuomo said he is suing UBS AG for misleading investors into buying auction-rate securities just five months before the market collapsed.

"Not only is UBS guilty of committing a flagrant breach of trust between the bank and its customers, its top executives jumped ship as soon as the securities market started to collapse, leaving...

"The U.S. and global financial systems are going through a very challenging period of adjustment. The critical imperative today is to help facilitate that adjustment and to cushion its impact on the broader economy. The forces that made the system vulnerable to this crisis took a long time to build up, and the system will need some time to work through their aftermath," said Geithner.

"The U.S. housing market continues to be very weak, and with the inventory of unsold homes continuing to rise we are unlikely to see any meaningful turnaround in the sector in the near term," said Millan Mulraine, economics strategist at TD Securities.

The NAR said foreclosures represent one-third to 40% of all sales and cause a downward distortion to the price data.