Today’s new home sales print of 627,000, the lowest in nine months, came in well under market consensus of 645,000. The only surprise is that the market consensus was so high to begin with. The National Association of Realtors’ index of housing affordability (including home prices, mortgage rates, and median income) has tracked the broader existing home sales number all along.

unnamed

This makes sense in the context of the revolving credit picture. As I noted last week, changes in retail sales have become highly correlated with changes in revolving credit:

unnamed (1)

Households are borrowing more on their credit cards and buying more, but are reducing investment in homes. All in all, not a robust picture.