What's the true supply of new homes for sale?

Mike “Mish” Shedlock's Sitka Pacific Capital Management,Llc

Let's dive into builder speculation and the true supply of new homes .

New Home Sales Did Not Really Rise, They Fell Nearly 7 Percent

Yesterday, in New Home Sales Did Not Really Rise, They Fell Nearly 7 Percent, I noted Inaccurate and misleading headlines on new home sales.

Census Bureau Report Details

Sales: New Home Sales Sales of new single‐family houses in October 2021 were at a seasonally adjusted annual rate of 745,000. This is 0.4 percent above the revised September rate of 742,000, but is 23.1 percent below the October 2020 estimate of 969,000.
Sales Price: The median sales price of new houses sold in October 2021 was $407,700. The average sales price was $477,800.
For Sale Inventory: The seasonally‐adjusted estimate of new houses for sale at the end of October was 389,000.
Supply: This represents a supply of 6.3 months at the current sales rate.

For Sale Inventory

The "For Sale" inventory is reportedly 388,000 not adjusted, (389,000 seasonally-adjusted).

As one of my readers also noted, those homes are not really available.

True Inventory

388,000 Total
245,000 Under Construction
106,000 Not Started
34,000 Finished

The true supply is 34,000 but if you want to be liberal, then add in those under construction.

245,000 homes under construction is a historically high number. So is the total, but the total is misleading.

Author

Mike “Mish” Shedlock's

Sitka Pacific Capital Management,Llc

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