July new home sales rose to 372,000 [about 365,000 expected]. Sales exceeded estimate, but the level of activity is still depressed. The graphic following puts sales in perspective. What remains more interesting is the low level of inventories. Competition from the existing market is holding back inventories, but the data also indicates that a spark in housing demand could quickly help growth by translating into new construction.
The September 10 year contract continues to work on yesterday's rally. Chart watchers will probably eye the 7/27 low of 133-26+ and the 8/10 high of 133-27+ as important to direction and a continued rally. Today's low at 133-10 and the high from 8/15 at 133-06 may be monitored below for insight into the rally's strength.
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