Builders scale back, but not as fast as buyers dry up

September 26th, 2008

Residential developers, during the boom, built, sold, and then built some more. Now they're taking a welcome breather.

The new home inventory is the lowest it has been since August 2004, according to a new Census Bureau report. Unfortunately, new home sales dropped 11.5% to a 17-year low in August. The supply of homes at the current feeble sales pace dropped to a 10.3 months supply in August from 10.9 months in July.

This graph from the Businomics Blog gives you a good picture of the dramatic rise and fall of new construction.

New Homes.jpg