Homebuilder inventory of started and completed homes is soaring but sales are weak.
New Homes for Sale by Stage of Construction
- Total: 495,000. The most since December 2007.
- Started Plus Completed: 389,000. The most since May 2008.
- Under Construction: 274,000
- Completed: 115,000. The most since August 2009.
- Not Started: 106,000
Not started means vacant land. Started, and especially completed, represent speculative building.
New Home Sales Annualized vs Homes for Sale Detail
New home sales are seasonally adjusted and annualized totals. The stage of construction numbers are seasonally adjusted but not annualized.
New Homes for Sale as Percent of New Home Sales
Elevated for Sale Numbers
- Total: 75 Percent
- Under Construction or Complete: 59 percent
- Completed: 18 percent
The above is a new chart I added just today.
Amusingly, in the middle of the Great Recession, there were more homes for sale than the annualized number of new home sales. That number includes homes not started.
Not started homes represent a land commitment, whereas started and completed homes represent heightened speculation.
Unfortunately, this data series only dates to 1999, but the current numbers appear very elevated compared to the data we do have.
This rates to pressure prices unless demand picks up.
Note: The above charts and commentary pertain to new single-family homes. The following data represents all units under construction including multifamily.
Housing Units Under Construction
Housing Units Under Construction Detail
The number of units under construction is rapidly falling. It’s down from 1.71 million to 1.41 million, a decline of 17.7 percent.
In the Great Recession, the number of completed units topped at 1.42 million. So, this is a very elevated number.
However, most of this is multi-family in stark contrast to the Great Recession.
What’s Happening?
We are building apartments for immigrants who are here (legally or illegally) and others who aren’t going to get here because Trump effectively closed the border.
Completed units have not yet impacted the price of rent, at least renewals. How long can that last?
Related Posts
February 19, 2025: Housing Starts Drop 9.8 Percent, Unable to Retain Any Traction
Housing starts have mostly been rangebound since late 2022 as high prices and high mortgage rates dampen demand.
February 21, 2025: Student Loan Borrowers Crushed by Appeals Court Ruling, Credit Scores Plunge
The courts are busy. This one goes against Biden. Economic repercussions are significant.
February 21, 2025: Existing-Home Sales Drop 4.9 Percent in January, More Than Expected
After three months of increases, sale took a big dive in January.
February 25, 2025: US Consumer Confidence Drops at Sharpest Pace in 3-1/2 Years
Consumers are concerned over inflation. Recession should be the bigger fear.
February 26, 2025: New Home Sales Plunge 10.5 Percent in January From Upward Revision
New home sales have been mostly sideways at a weak level, in a choppy fashion.
With all the carnage in homebuilders and in other real estate, it’s amazing to me that short real estate ETFs keep losing ground. They just do the inverse of bond yields.
So… 2008, huh? Well, nothing interesting happened in the markets during that year, as far as I can remember! LOL
House inflation is controlled by the trading desk’s open market operations of the selling type.
Trump tariffs are back on March 4 for Canada & Mexico contradicting other timelines.
Talk about a bipolar unstable policy announcements. Sheesh. Give it a day or two and the policy will change…..this does wonders for business planning.
https://www.cnbc.com/2025/02/27/trump-says-mexico-canada-tariffs-will-start-march-4-plus-additional-10percent-on-china.html
Weirdest Housing Bubble EverIt’s not clear how this resolves
https://rubino.substack.com/p/the-weirdest-housing-bubble-ever
re: “market requires ever-increasing government intervention”
Late to the game. That was predicted in May 1980 because of the DIDMCA of March 31st, 1980, that turned all the thrifts, the CUs, MSBs, and S&Ls into banks.
The way to drop housing prices is for the trading desk to conduct open market operations of the selling type and leave interest rates alone.
The full truth about the great things DOGE can and cannot doElon Musk and DOGE need to prove that the operation is about change, not chaos https://www.foxnews.com/opinion/full-truth-about-great-things-doge-can-cannot-do
Imma need a great big old fashioned recession.
That super cool red one where everyone is happy for blood on the streets or whatever the heck….
Twenty percent drop in value at the very least.
All of us running around screaming that the sky is falling.
That one.
End of the world.
Never gonna be the same.
The new normal..
Buy way before those pesky green shoots….
You know that one?.
Do you? Really?
Me and missus rat sitting on a big pile of cash likey that uncle Warren which we pay reverence to before meals.
Drooling in our buckets coveting a two two ocean front condo up on a giant rock solid point…
Global changing and all…..
Those poor inbred who bought on the sandy beach gonna be underwater figuratively and literally 😳
Sleep well comrades.
Sun might come up tomorrow.
Look east.
You are therefore WISHING for another PLANDEMIC to shut it all down and shut people up and have them SCARED OF NOTHING.
This was spoken about awhile back on this site. Now: “Homebuilder inventory of started and completed homes is soaring but sales are weak”. It appears as though it got much worse. I suspected this moment, and if it wasn’t for “Rate” nonsense, and various “Shenanigan’s“ of sorts, we could have dealt with this earlier. Now unfortunately much larger implications have arisen.
So now we have 274K Under Construction! That’s a lot of “Single Family homes” coming up for sale, with a lot of existing inventory by sellers I would imagine? Add on another 115K Completed, so for sale now. Thus leaving 106K Not Yet Started. “This rates to pressure prices unless demand picks up”. You bet it does!
I suspect the 106K not yet started, won’t be for the foreseeable future. Most money will go to playing “Catch Up” and not losing what they already have. The 115k Completed will be mostly sold to the ones comfortable enough to buy at the prices still being “Hoped” for, and the remaining may have to drop slightly, and that will be the end of “Buyers” at even close to expected prices (IMO) for a very long time.
This is where the implications come into play. Many Builders may find themselves stretched, and be forced to sell at “Cost” or worse “A Loss” it’s quite possible, that many homes will become available at quite a bit less than what may have sold for just a year or 3 ago? That may be the only option available. That could cause some panic in buyers from before, not to mention when they get re-accessed, and especially if it’s soon. You could end up, upside down on your new mortgage of 1 year ago?
We still have a recession/correction on its way, of some sort, don’t we? I don’t care what gets saved, as we still owe a whole lot more I think, from the sounds of it. That’s going to take awhile to come back from. Do the builders/sellers have the Time? Money? Buyers? I guess we are about to find out. I say “Not Even Close” and the Banks can’t help this time either… oh, and all those Multi-Family Homes too…
Don’t you guys understand? America is UNDERSUPPLIED! Just ask your friendly neighborhood reel-A-tor if you’re not sure! EVERYBODY knows that homebuilders have been leaving money on the table for a decade by opting not to build in the face of great demand! (Not).
Must be a $25,000 first time home buyer credit coming.
Possibly a $5,000 cash for Clunkers auto credit also
That should move inventory. Not.
.O
The Job Market Is Frozen
Unemployment is low, but workers aren’t quitting and businesses aren’t hiring. What’s going on? The Job Market Is Frozen – The Atlantic (archive.ph)
The Atlantic is not a credible source, to anyone who has investigated topics of their earlier articles.
“Total: 495,000. The most since December 2007.”
That’s a very ominous sign, the month the GR started.
But hey, when the Big Boy builders are giving lenders at least $30K to buy down mortgages & still have close to 30% gross margin, then trust me: They really ain’t hurtin YET . . . but every dog has his day.
Air BnB’s have started listing for sale by owner. The speculative sector of the real estate market is popping.
My wife and I were planning a two week vacation in June visiting national parks in UT and CO. We just canceled our reservations at two hotels and one AirBnB. That’s a budgeted 3.5 to 4K not being spent into this economy. Thank you to Trump for fucking up our NPS. Maybe we can take that vacation in four years.
That’s not exactly what Trump had in mind. As He stated, everybody will have to feel some pain. He isn’t promising or even expecting people to be taking vacations and going to Disneyland! His goal is to get enough prosperity, back into the hands of the people, so as to pay down the massive debt this country is dealing with.
Sure some have the means to do so, but not the majority that’s for certain. I don’t! I wish you well and enjoy that vacation when you can. I am hoping for mid-2026 for a 5-7 day one myself, hopefully!
The pain will be felt by the non wealthy.
I’m hoping to ride the Siberian Express once US-Russian relations thaw and tourism resumes.
Love to see Vladivostok- to bad they discontinued the ferry service to Japan, now you have to go to south korea and then transfer to another ferry to get to japan.
My wife and I were planning a two week vacation in June visiting national parks in UT and CO. We just canceled our reservations at two hotels and one AirBnB. That’s a budgeted 3.5 to 4K not being spent into this economy.
Yeah, we heard you the first time, lol.
I wonder if that’s Honest Joe’s burner account? he used to repeat himself a good bit, could be Cornpop though..
Source? Evidence?
Now factor in prices compared to the Great Recession. Double or triple the cost of housing?
Means-of-payment money was held constant for 4 years prior to the GFC by Bernanke draining legal reserves for 29 contiguous months.
Demand for new builds is super soft (in the midwest at least). One of the issues that works against new home construction/sales is the disconnect between price per SF of existing vs new builds. Existing is somewhere in the $150-$200/SF range; new builds are $250-300/SF. I’ve heard from large residential builders that that disconnect needs to rectify before they’ll continue to invest in new developments. Personally, I’d rather improve my existing home vs move into something larger and (vastly) more expensive – my gut says I’m not alone.
I wish we had sq ft prices like yours in Colorado. We’ve been invaded by California and NY, pushing prices to $3-500 a sq ft. Little pre-WW2 homes remodeled for $500 an sq ft. (Denver). One needs over a $100k down payment for a cracker box home with a $4 to $5000 monthly payment. It’s insanity.
Come on over to my County, it’ll make you feel better – $1200+ per sq.ft.
https://sanjuanislander.com/opinion/columnists/38979/merri-ann-simonson-real-estate-updates-general-costs-to-buy-sell-or-build
Or the builders need to drop their margins to offset the risk of having to sit on the property in an economic downturn.
Time was for me in Toledo, it was cheaper to build than to take on the HELOC debt in buying an existing home. Fantastic savings for me there. I wonder how much of that is playing out today (existing holding out to payoff 2nd mortgages and HELOCs).
Not at all! I downsized from a Colonial to a ranch awhile back. Best Move ever! We now use every room, heat and a/c is a lot less, and maintenance cost are half if that! The Big One of course was taxes, as we went from 14K to 6K and location had something to do with that of course. We saved enough to add a bigger deck on last year! Buy what you will use, and most can move tomorrow…