Are Homebuilders Building Too Many Houses?

With the recent increase in single family housing starts, a key question is: Are the home builders starting too many homes? The answer is no.
Part of the increase for starts in December and January can be explained by the unseasonably warm weather in most of the country. The reported number is seasonally adjusted, and usually January is the weakest month of the year for housing starts – so nice weather can make a difference. Building activity will pick up in March, and that will be a key month for starts.
However the builders are also responding to sales. As I’ve noted before, we can’t directly compare single family housing starts to new home sales

. For starts of single family structures, the Census Bureau includes owner built units and units built for rent that are not included in the new home sales report. Full Story

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