Seems like the glut of new homes on the market has finally come down to within 6-months inventory, a metric that indicates the glut of homes on the market has finally — FINALLY — come back to within some degree of normalcy.
The inventory of completed homes for sale was at 54,000 units in February. The combined total of completed and under construction is at the lowest level since this series started.
The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).
In February 2012 (red column), 25 thousand new homes were sold (NSA). Last year only 22 thousand homes were sold in February (although 2012 is a leap year). This was the second weakest February since this data has been tracked – the third weakest was February 2010 with 27 thousand homes sold. The high for February was 109 thousand in 2005.
So what does this mean for the economy? A couple of things.
First, the market has bottomed out once again in the aftermath of the mortgage tax credit repeal, probably one of the more poorly thought out decisions of the Obama administration in terms of raw policy.
Second, as the market picks up steam, whether you are looking at a new home in charlotte nc or Beverly Hills CA, the demand for new homes will improve, — a metric that impacts over two dozen key American manufacturing sectors. If you’re already wanting a new home to settle down in, you might want to see all things Realty Richmond Hill. Those living in the Charlotte area of North Carolina will be happy to hear this news of increased demand for new homes; Saussy Burbank will be able to fulfill some of this demand in the Charlotte neighborhoods in which they are constructing their homes.
The bottom line? The recovery cometh (and right soon) provided that energy prices or a Euro collapse doesn’t spray Roundup on some very firm green shoots. The only additional caveat? 3% GDP growth will more than likely be the “new normal” for a few years until the American consumer finally pays down their credit card debt. Once that happens in late 2013… the inflationary pressures of two rounds of qualitative easing could pose a significant threat to the economy.
As always… fear the boom, not the bust.