New home sales plummet, record months of unsold inventory under construction

in Estimated risk per 26.07.2022 11:48:00

Today in the Calculated Risk Real Estate newsletter: New home sales plummet, record months of unsold inventory under construction

Extract from the letter:

The following chart shows the months of deliveries by construction stage. “Months of delivery” is the inventory at each stage divided by the sales level.

active inventoryThe delivery is over a little over 0.83 months (red line). This is about two-thirds of the normal level.

The inventory of new houses under construction is 6.22 months. (blue line) – significantly above the normal level. This increased level of homes under construction is due to restrictions in the supply chain. This is an absolute record; higher than the previous record set in 1980.

And record 110 thousand houses were never launched – about 2.24 months supply (grey line) – more than double the normal level. Developers are likely to delay building some homes until they have tighter controls on prices and demand.

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