July’s new home figures will be read as a disappointment, as both the number of sales and change from the month before fell well short of expectations. But it’s important to keep things in context. Today’s figures are on a host of monthly revisions that together indicate a robust trend.
Sales are now up 4% year-to-date, with 2019 on pace to be the best year for new home sales since 2007. With inventory and mortgage rates low, there’s still plenty of runway for builders to add new homes to a market that’s hungry for housing stock. Homebuilder sentiment remains strong despite persistent headwinds in the form of expensive labor, a shortage of land and growing signs that a recession could be on the horizon.