Latest News

New Home Sales Increased in August; Completed Inventory Increased


by Calculated Risk on 9/27/2022 03:54:00 PM

Today, in the Calculated Risk Real Estate Newsletter: New Home Sales Increased in August; Completed Inventory Increased

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 0.86 months of completed supply (red line). This is about 60% of the normal level.

The inventory of new homes under construction is at 5.36 months (blue line). This elevated level of homes under construction is due to supply chain constraints.

And a record 106 thousand homes have not been started – about 1.86 months of supply (grey line) – about double the normal level. Homebuilders are probably waiting to start some homes until they have a firmer grasp on prices and demand.

First, as I discussed yesterday, the Census Bureau overestimates sales, and underestimates inventory when cancellation rates are rising, see: New Home Sales and Cancellations: Net vs Gross Sales. So, take the headline sales number with a large grain of salt – the actual negative impact on the homebuilders is greater than the headline number suggests!

There are a large number of homes under construction, and 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

Bond Report: 10-year Treasury yield notches another 12-year high on its way to 4%

Previous article

: Big banks to pay nearly $2 billion for ‘widespread and longstanding failures’ in keeping text-message records

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News