This is not a positive sign as it will probably lead to a further drop in construction of new homes. 300,000 new homes were sold in May which is a 32.7% drop from April's numbers. For the Current Press Release. It is now estimated that it will take 8.5 months for all new homes to sell given current inventory and sales, this is a significant jump from last months 5.8 months. We have also seen a drop in the amount of homes for sale. One possible explanation: depressed housing values and demand has led to home builders waiting for current inventory to clear and demand to pick up. This is not good news for durable goods producers as it means depressed demand for all the things that usually go along with a new house.
Reactions to the data from WSJ can be found here.