Surging demand has led to a sharp drop in the number of new homes for sale, with the fall driven by a collapse in the inventory of completed homes. A jump in single-family building permits will provide some support to overall new home supply but, given the time it takes to build a home, completed inventory will remain tight. Accordingly, we expect new home sales will fall back from over 1 million annualised in August to around 900,000 by early next year.
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