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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (51260)	5/16/2006 2:29:33 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 116555

re: "The National Association of Realtors forecast new home sales this year will fall 12 percent to 1.134 million from a record 1.283 million last year. Slowing sales have caused inventories to pile up. The number of new homes for sale at the end of March was a record 555,000, the Commerce Department said April 26." That means the months supply on new homes alone is now 6 months and still climbing, based on (imo still too optimistic) current estimates. Now throw in this stat: "Housing starts fell 7.4 percent in April, the third straight drop, to an annual rate of 1.849 million from 1.996 million." This shows builders are still starting an estimated 715,000 more houses this year than it is estimated will be sold. Lastly we have this stat: "Building permits, a sign of future construction, fell 5.4 percent to an annual rate of 1.984 million..." So they are building 715,000 more homes than will sell, but are planning to build 135,000 more homes ABOVE the 715K excess homes. Months inventory will be (555K+715K+135K)/(1134/12) = 140500/94,500 = about 15 months. And this is just the NEW homes! The managements of the builders sure seem to be on track to look like complete idiots.