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New Home Sales Decrease Sharply, Record Months of Unsold Inventory Under Construction


Today, in the Calculated Risk Real Estate Newsletter:

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 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.

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.You can subscribe at

Tuesday: New Home Sales, Richmond Fed Mfg

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