Despite what you may have heard about a housing shortage, there were plenty of single-family homes for sale at the end of October, with the only catch being that most of them weren’t finished yet.
New homes for sale totaled 389,000 at the end of the month, a bump from 378,000 in September and the highest since 2008, according to the Census Bureau’s report on new residential sales released Wednesday. However, all but 38,000 of them were still being built or hadn’t even been started. Just 9.3% of new homes for sale were finished, the second-lowest such ratio since the Census Bureau started keeping track in 1999. Despite the healthy supply, sales of new homes were down 23.1% from the previous year (but up 0.4% from September). One likely explanation: the median home price of $407,700, a record high.
The rising prices and high demand for homes fueled by the pandemic have provided plenty of reasons for builders to put shovel to earth and break ground for new construction—if they can get past the supply and labor difficulties of recent months.
“Builders have plenty of projects in the pipeline to meet demand and are likely to keep construction activity running on all cylinders for the foreseeable future,” economists at First Trust said in a commentary. “As more homes become available, we expect demand will remain strong and help boost sales later in 2021 and beyond.”
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