Gregory White just highlighted how August new home sales missed expectations today. 8.6 months of housing reply remains in the system, but homebuilder stocks are however rising.
It’s true that durable goods data also came in stronger than expected today, which helped the market, but homebuilders are generally outperforming the S&P 500 as shown below.
We noted earlier how homebuilder action was picking up in the pre-market after KB Homes beat revenue expectations, but now it’s gone full steam and is yet another example of housing stocks rising on what appears to be weak housing data. Keep in mind it happened on Monday too.
Thus today we have been delivered yet another sign that the expectations hurdle is extremely low for housing stocks. They can just trip over it.