Why homebuilders aren’t building more homes

Today, the new home sales data perfectly explains why housing permits are near cycle lows and why we can’t get any traction on building more homes in America, as we have been basically stuck in one sales range for 10 years. If I take away the surge in new home sales early in COVID and the lows in 2022, we have been in the same sales range for a very long time. Even at this low level new home sales are massively outperforming existing home sales, as sales are at 2019 levels, which would equate to 1 to 1.3 million more existing home sales, but the builders live in a sub-6% world, where existing home sales don’t. With today’s charts, you can see why housing permits are near cycle lows. New home sales From Census: New Home Sales: Sales of new single-family houses in June 2026 were at a seasonally-adjusted annual rate of 628,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.6 percent (±14.8 percent)* above the May 2026 rate of 618,000, and is 5.6 percent (±13.2 percent)* below the June 2025 rate of 665,000.The reality for new home sales is that we are stuck in a channel here: sales grow toward 700,...