Since the COVID-19 virus shutdown during the second half of March and April, housing has been on a Super "V" recovery. Homebuilders across the country have been operating at more than 150% of their production capacity, creating increased pressure on their supply chain and building material manufacturers in addition to the disruption caused by COVID-19 virus related plant closures.
Since April, single family home permits have increased 68.2% and single family starts have expanded 74.9%. New home sales rocketed up during the last six months to 75.3%, averaging an annual rate of over a million sales for the last three months. The inventory of new homes has diminished by 13.9% overall while the completed home inventory dropped 42.9%. Currently the inventory represents only 3.3 months of supply. Builders are going to ahve a hard time replenishing the inventory since average construction times are longer than the months of supply.
Existing home sales have also increased 75.2% from 3.91 million to a very strong 6.85 million annual rate. Inventories of existing homes for sale have continued to drop with the monthly supply of available home decreasing 37.5% to 2.5 months. In October 72% of the homes sold were on the market for less than a month.
Updated: December 2020
Charles C. Shinn, Jr., Ph.D.
President, Builder Partnerships / The Shinn Group