After a surprisingly strong 4/19 when new home sales hit an annualized rate of 679,000, new home sales returned to Earth in May with sales of 626,000. Nonetheless, YTD sales are up 4%. What’s worrying; new home inventories have been steadily rising and are now at 6.4 months, with the six highest readings since 8/11 all occurring since 9/18. This means builders should build fewer costly homes and more entry-level.