What is happening in the housing market? Monthly supply of new homes in the US surged to 9.8 months in June, the third-highest since 2008. This indicator measures how many months it would take to sell current builder inventory at the current sales pace. By comparison, the long-term median is 5.8 months. Since the 1960s, 5 of the 6 times builder supply reached this level, a recession followed. The only exception was 2022, when the economy narrowly avoided a recession. Homebuilders are struggling to sell inventory.(The Kobeissi Letter)