The excess supply of housing units is being worked off quickly. Here’s the picture for new single-family homes:
We’ve made a lot of progress towards a normal inventory of unsold homes. At the rate we’re going (and not making any forecasts about changes in new construction or home sales), we’ll be down to a normal inventory of unsold new homes by May of next year.
However, it’s not quite that good. There are many excess existing homes on the market. The overall vacancy rate is still very high. It will be much longer for the total housing inventory to look decent. Still, this is good news today.
Bill Conerly is principal of Conerly Consulting LLC, chief economist of abcInvesting.com, and was previously Senior Vice President at First Interstate Bank. Bill Conerly writes up-to-date comments on the economy on his blog called “Businomics” and produces a monthly audio magazine available on CD. Conerly is author of “Businomics™: From the Headlines to Your Bottom Line: How to Profit in Any Economic Cycle”, which connects the dots between the economic news and business decisions.