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Home Builders Hold the Most Homes For Sale Since December 2008

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4 comments on Home Builders Hold the Most Homes For Sale Since December 2008

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Homes by Stage of Construction

Homebuilders have 358,000 homes or lots on speculation that they would like to sell. 

  • 358,000 total
  • 214,000 homes are under construction
  • 110,000 lots unstarted 
  • 34,000 finished homes for sale 

New Home Sales 

In June, builders sold 60,000 homes. They have 358,000 for sale of which 248,000 are in progress or completed. 

Builders have a record 110,000 lots for homes they have not yet started construction. 

New Home Sales and Homes for Sale

Supply in Months 

Whether or not current speculation matters depends on the direction of sales.

Some builders held off sales because of soaring material costs (especially lumber). The supply of labor was also tight.

Regardless, prices have risen fast.

One has to wonder when affordability and willingness of buyers to stretch their budgets to buy homes hits a brick wall.

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Eddie_T
Eddie_T
4 years ago
New home builders have been skewing to the high end of the price spectrum, because they can’t make money at the low end with recent cost increases. There is only so much market for move-ups, and it is getting satisfied. That’s one piece.
Another is that new home sales were (May) less than 14% of home sales overall. In general, the market is mildly cooling off. New home sales are an important bellwether, but don’t read that much into it.
With rates still at historic lows, and legislation coming that will (if passed) give way down payments…..and with  Fannie and Freddie once again poised to make it easier for people with bad FICO scores to get a mortgage, I wouldn’t look for any kind of serious bubble-popping to occur this year.
With rates like this, at the current median income, houses are quite affordable by historic standards. Only downpayments present a hurdle. If you really want to see that explained, here is a link to a good source.
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Jacques Arnaut
Jacques Arnaut
4 years ago
Builders are the only potential short sellers in the Real Estate market. As such, they fulfill a unique welfare enhancing role: they’re the only ones putting a cap on the wild price rise. The crazier the market, the larger the home builders’  supply. Nothing wrong here. Capitalism at work. Beautifully.
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Doug78
Doug78
4 years ago
Reply to  Jacques Arnaut
I wouldn’t call them short-sellers since they own the houses they  sell and therefore don’t have to borrow houses in order to sell. Nevertheless it’s an interesting way to look at it. 
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shamrock
shamrock
4 years ago
I think it depends on the direction of mortgage rates.  Currently 3%, a drop to 2.5% will support even higher prices. 
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