US new home sales rose to 0.758 million in November. The previous figure was 0.737 million.
This is a month-on-month increase of 0.021 million. The data compares November with the prior month.
Housing Demand Signals Economic Strength
The rise in new home sales to 758,000 back in November 2025 was an early signal of underlying economic strength. This momentum suggested that consumer balance sheets were healthier than we had previously believed. We now see that this resilience has continued into the new year.
This trend has been confirmed by more recent data, with January 2026 housing starts beating forecasts at a 1.45 million annualized rate. The strength has created a firm floor for homebuilder equities and related sectors. Therefore, we are looking at call options on housing ETFs like XHB as a way to express a bullish view through the spring.
This persistent economic activity is changing expectations for interest rates. The probability of a rate cut in March, as implied by SOFR futures contracts, has fallen from over 60% a month ago to just under 20% today. We should therefore consider strategies that profit from the idea that the Federal Reserve will remain on hold, such as selling out-of-the-money call options on Treasury bond futures.
However, the recently released January Consumer Price Index, which came in slightly hot at 3.2%, adds a layer of complexity. This stubborn inflation, combined with strong housing, could force the Fed to maintain a hawkish tone. This increases the potential for short-term volatility, making options that benefit from choppy price action, like straddles on rate-sensitive indices, more attractive.
