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.

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.

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