On the surface, November’s double-digit decline in new home sales from October may look like an abrupt end to home builders’ recent hot streak, and compared to the past few months an annualized pace of 841,000 sales does look relatively weak. But context is everything, and sales in November were higher — by far — than in any single month in 2019. The back half of 2020 was a watershed moment for housing and especially builders, with a series of demographic, financial, social and public health factors combining to create the perfect storm for housing growth — and the runway is still clear headed into 2021. Record low mortgage rates, a shortage of existing homes for-sale on the market and increased interest in new, never lived-in homes have recently combined to propel new home sales volume to its highest level in nearly 15 years and stoked builder optimism to all-time highs. Eager buyers have been snapping up available new homes, an increasing share of which have not even begun construction, at their highest pace in years. But while competition remains elevated, today’s release does suggest at least in part that some of this recent optimism may have tempered, in part due to slowing economic activity and uncertainty brought upon by rising coronavirus case volumes across the country. For-sale inventory — normally not a huge concern for new home sales — may also be holding sales back as well. There were 43% fewer completed homes for sale in November than there were a year ago, limiting the supply of finished homes for many buyers to browse and purchase. Given these constraints, it was almost inevitable that new home sales figures would slow sometime soon. The torrid pace of the late summer and early fall may have moderated, but indications suggest the market for new homes remains very strong.