New Home Sale were just released and they were the strongest since January 2008 rising 16.6% to a seasonally adjusted annualized rate of 619k. The past 3 months were revised up also making this a very strong upside surprise. A quick disclosure: Bellaire Capital Management, LLC has been overweight housing stocks in client accounts since 2010 through holdings in ITB & XHB.
Inventories of New Homes are currently at 247k which represents 4.7 months of inventories at current sales levels. 6 months of inventories is considered normal for New Home Sales. Lower inventories predict continued increases in home construction.