A June decline in new home sales was to be expected given recent market shifts and reported slump in homebuilder sentiment, but the reported value of 590,000 new home sales in June was way under consensus and in line with the low levels that followed the onset of the pandemic in April 2020. After months of racing to put up homes in order to meet the red hot housing market conditions, builders are suddenly seeing more and more contract cancellations, sellers of existing homes cutting prices, and homes lingering on the market. Buyers, meanwhile, have scaled back their activity amid persistent affordability challenges and rising home buying costs. And this may just be the beginning of a difficult stretch for the homebuilding industry. Decelerations in housing permits and starts activity will put a cap on sales in the near term and suggests that builders are bracing for rougher road ahead, even as the housing market remains hungry for more inventory with long run demand staying put.