Mar
27

Dwelling Dearth

 Friday’s new housing sales data was troubling. February sales of 618,000 were up just 0.5% Y-o-Y and YTD sales are up just 2%! Maybe it’s the new tax laws, maybe it’s rates; in a few months we’ll know. The immediate problem; new home prices are skyrocketing, up 9.7% Y-o-Y, and inventories of (increasingly highly priced) new homes are at 5.9 months so they’re regrettably balanced. New cheaper homes remain MIA!

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Comments

  1. Chad Wood says:

    Why would new home prices be so high when there is such a large inventory at 5.9 months?

    • Elliot says:

      THe homes are costly as they are on land that is very expensive due to land use regulations that are very restrictive. And as the land get more expensive, the ultimate home price must rise with it and than some. And, the inventory level at 6 months is normal and appropriate. This means that we are not likely to see much increase in homes of this size and price. So growth will have to come from elsewhere in the new housing firmament.

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