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 new homes under construction is at 5.0 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 a record 115 thousand homes have not been started – about 2.0 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.
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