New Home Inventory

A couple of thoughts about this chart from Calculated Risk…..

• The inventory of new homes for sale has fallen dramatically.  
• That’s probably mainly attributable to a couple of things:  1) Banks have curtailed if not eliminated the financing of “spec” homes and 2) Builders have seen demand plummet and have therefore reduced the amount of homes they are building that aren’t sold.
• Remember that a market that is considered “balanced” between buyer and seller is one that has three to six months worth of inventory.    So, we’ve improved a lot since the worst of it but it’s not a “balanced” new home market yet.

If you read Calculated Risk, you’d know that he’s predicting that the new home market will bottom much sooner than the existing home market.   This chart supports that theory, in my opinion.   But keep in mind, a bottom and a rebound are two different things.    He’s predicting a bottom and then bouncing along the bottom for quite some time……

Tom Vanderwell

New Home Inventory

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