New-home sales shot up in May, rising 7.6% for the month to a seasonally adjusted annual rate of 369,000, according to data released today by the U.S. Department of Commerce. Annually, sales were up 19.8%.

The report had plenty of other good news as well. Estimates for February and March were both revised up; inventory of completed homes for sale were at an all-time low; and new-home prices moved up for the fourth consecutive month.

The bad news is the market may not be quite as gangbusters as the numbers first appear. "One should never get too excited (or depressed) by the latest new-home sales figures because they are not estimated very well," wrote Patrick Newport, U.S. economist at IHS Global Insight, in a statement today. "May’s estimate fails the statistical significance test. (It almost always does.)"

Instead, Newport prefers to keep an eye on three-month moving averages, which he says show "sales inching up nationally and in three of the four regions," the exception being the Midwest. For support, he points to permit and builder sentiment data, which evidence the same trend.

See the Department of Commerce's full release on May’s new-home sales numbers.

Claire Easley is senior editor, online, at Builder.

Learn more about markets featured in this article: Greenville, SC.