Brief excerpt:
The next graph shows new home sales for 2021 and 2022 by month (Seasonally Adjusted Annual Rate). Sales in February 2022 were down 6.2% from February 2021.
The year-over-year comparisons will be easier going forward.
…
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.
The inventory of completed homes for sale was at 35 thousand in February, up from the record low of 33 thousand in several months in 2021. That is about 0.5 months of completed supply (red line). This is about half the normal level.
The inventory of new homes under construction is at 4.1 months (blue line) – well above the normal level. This elevated level of homes under construction is due to supply chain constraints.
And 106 thousand homes have not been started – about 1.7 months of supply (grey line) – almost double the normal level. Homebuilders are probably waiting to start some homes until they have a firmer grasp on prices.
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