Massive home supply growth is not expected to trigger a rapid home sales boom. Builders operate for profit and will only expand construction when multifamily costs align with rents and the cost of capital. Housing starts remain largely unchanged, with privately owned starts in April at a seasonally adjusted annual rate of 1.465 million. Single-family starts in April were 930,000, below the revised March level. Builders have too many completed units left unsold because new home sales have not meaningfully grown for years. Completed units for sale are around 121,000, which limits incentives to build more homes. New home sales remain elevated versus 2019 but are not crashing or accelerating.
"Now, while some in government and non-business people on the internet think this way, the private sector doesn't, because it runs businesses to make money. Also, the cost to build multifamily housing needs to make sense relative to rents and the cost of capital otherwise, you're a terrible businessperson and you'll be out of business."
"What's happening here is that builders have too many completed units left unsold as new home sales haven't gone anywhere for years. Now, new home sales are still at elevated levels compared to 2019, prior to the pandemic. They're not crashing by any means, but they're not really growing."
"Back in December 2024, I wrote that builders have a supply problem, meaning their completed units for sale had reached 120,000, which is too much for them to get confined about building many more homes. Currently, the number of completed housing units for sale is 121,000."
"Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1.465 million. This is 2.8% (11%) below the revised March estimate of 1.507 million but 4.6% (13.9 percent) above the April 2025 rate of 1.4 million. Single-family housing starts in April were at a rate of 930,000; this is 9% (7.5%) below the revised March figure of 1.022 million."
Read at www.housingwire.com
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