The Census Department supply of homes numbers are bogus. Let’s discuss better numbers and implications.
The Census Department says there are 500,000 homes for sale. Of them, 102,000 are not started vacant plots. 119,00 homes are finished.
New Homes for Sale by Stage of Construction
Stage of Construction Details
- Not Started: 102,000
- Finished: 119,000
- Under Construction: 279,000
- Started or Completed: 398,000
- Total: 500,000
New Homes for Sale Supply in Months
Supply in Months Detail
- Alleged Supply: 8.9 Months
- Under Construction or Finished: 7.1 Months
- Finished: 2.1 Months
The Census Department would calculate 8.9 percent no matter if none were started or all were finished.
This post is not about supply calculations but rather about homebuilder speculation.
New Homes for Sale as Percent of New Home Sales
New Homes for Sale as Percent of New Home Sales Details
- Completed: 18 percent
- Under Construction or Completed: 59 percent
The 59 percent under construction or construction or completed percentage is very elevated compared to 2013-2020 and 2001-2006 pre-Great Recession.
Stage of Construction Highlights
Homebuilder Speculation
- 398,000 started or completed is the most since 405,000 in March of 2008
- 102,000 vacant lots for sale is the most in history
- 119,000 completed homes for sale is the most since 126,000 in July of 2009.
Homebuilders will be under increasing pressure to unload the started and completed homes at falling prices if recession hits.
The economy was slowing anyway and Trump’s tariffs will bite.
Homebuilder Pressures
Homebuilders have cost pressures on steel and lumber due to tariffs. The have labor supply issues with deportations.
A slowing economy and need to get rid of started and finished homes will overrule. Margins will drop.
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