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April New Home Sales Decline Sharply, almost 6 Months of Inventory Under Construction

Today, in the Calculated Risk Real Estate Newsletter: April New Home Sales Decline Sharply, almost 6 Months of Inventory Under Construction

Brief excerpt: The next graph shows the months of supply by stage of construction. “Months of supply” is inventory at each stage, divided by the sales rate.

The inventory of completed homes for sale was at 38 thousand in April, up from the record low of 32 thousand in several months in 2021 and early 2022. That is just over 0.8 months of completed supply (red line). This is lower than the normal level.

The inventory of new homes under construction is at 5.9 months (blue line) – well above the normal level. This elevated level of homes under construction is due to supply chain constraints. This is close to the record set in 1980.

And 118 thousand homes have not been started – about 2.4 months of supply (grey line) – almost double the normal level. Homebuilders are probably waiting to start some homes until they have a firmer grasp on prices and demand.You can subscribe at https://calculatedrisk.substack.com/.

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