by Calculated Risk on 7/26/2022 11:48:00 AM
Tuesday, July 26, 2022
New Home Sales Decrease Sharply, Record Months of Unsold Inventory Under Construction
Today, in the Calculated Risk Real Estate Newsletter: New Home Sales Decrease Sharply, Record Months of Unsold Inventory Under Construction
Brief excerpt:
The next graph shows the months of supply by stage of construction. “Months of supply” is inventory at each stage, divided by the sales rate.You can subscribe at https://calculatedrisk.substack.com/.
There are just over 0.83 months of completed supply (red line). This is about two-thirds of the normal level.
The inventory of new homes under construction is at 6.22 months (blue line) - well above the normal level. This elevated level of homes under construction is due to supply chain constraints. This is the all-time record; above the previous record set in 1980.
And a record 110 thousand homes have not been started - about 2.24 months of supply (grey line) - more than double the normal level. Homebuilders are probably waiting to start some homes until they have a firmer grasp on prices and demand.