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 1.06 months of completed supply (red line). This is about two-thirds of the normal level.
The inventory of new homes under construction is at 7.33 months (blue line) - a new record and well above the normal level. This elevated level of homes under construction is due to supply chain constraints.
And a record 107 thousand homes have not been started - about 2.51 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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This suggests we will see a sharp increase in completed inventory over the next several months - and that will put pressure on new home prices.
