New home sales rose in May, bucking widespread signs of a housing market slowdown. But given the volatility in the data we wouldn’t put too much weight on one month’s reading. After all, new home sales are not immune to higher financing costs and survey measures point to a fall in sales over the next couple of months. While a healthier inventory means the new home market will outperform existing sales, we still expect a fall in sales to around 630,000 annualised by end-2022.
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