New home sales inched up 0.3% m/m to 352,000 in April, below expectations. The report also included annual benchmark revisions that moved new home sales slightly lower at 351,000 in March versus the previous estimate of 356,000. Sales fell 3.8% in the West as builders struggled to compete with the overhang of distressed properties for sale. Sales increased 1.9% in the South and held steady in the Northeast and Midwest. Inventory of homes for sale fell 4.2% to 297,000, roughly half of the inventory at the peak in April 2007. Most of the decline has been in inventory of homes under construction, but over the past several months, inventory of completed homes has started to edge lower. The decline in inventory reduced months supply to 10.1, the lowest since July of last year. The new home market has started the painful process of normalizing owing to aggressive construction cuts.