New home sales plunged 8.4% in June - the steepest decline since February of last year. The decline was exaggerated by the upward revision in May from 369k units at an annual rate to 382k - but even so, the 350k we did see in June was far beiow the consensus estimate of 372k, not to mention coming in at the lowest level since January. The median price was cut 1.9% on a MOM basis and has deflated 3.2% from year-ago levels. The inventory situation also detenorated, with the unsold backlog going from 4.5 months‘ supply in May hack to 4.9 in June — where it had heen in March and April...
How can it possibly be that the housing market is showing a durable recovery when it is still taking a median of eight months for the builders to find a buyer upon completion of the unit? Up until April 2008 — in the midst of the Great Recession - a number this high was unheardof, having happened but once previously and that was the peak of the previous housing market meltdown in June 1991. See the chart below
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