New Home Supplies Plummet, Pressuring Home Prices Higher

Mortgage and Lending with Chris Brown | Certified Mortgage Planners NMLS 303797

The supply of newly-built homes fell to its lowest levels since 2006, offering additional proof of a housing market in recovery.

Home supply is defined as the amount of time it would take to sell the current inventory of homes at the current pace of sales.

In October, for the 8th consecutive month, home supplies fell. Since peaking in January 2009, it's now down by almost half.

Lower supply leads to higher prices.  This is Economics 101.

Furthermore, supply is expected fall into 2010. According to the government, builders are breaking ground on new homes at a declining pace, even as sales ramp up.

Builders are cheering the October New Home Sales report, but its the everyday sellers of "existing homes" that have real reason to celebrate.



New Home Supplies Plummet, Pressuring Home Prices Higher




Chris is Florida's #1 FHA Mortgage Broker and a syndicated mortgage blogger. He is regular contributor to the three leading industry blog-fronts including The Mortgage Chili Blog, My FHA Mortgage Blog, Top of Mind Networks, the newest contributor to Lenderama and recently featured on Fox35 News.

Chris can be found at
Orlando FHA Loans,
or by calling 407.377.0500 x 210


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Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Chris, I've seen these reports and remain a little skeptical.  We are still driven by some more distressed properties that I think will keep prices down, not necessarily further down, but it seems to be level.  Some areas are in fact showing price increases now, but it's local and limited.  Thanks for the great post.

Nov 30, 2009 10:50 PM #1
Chris Brown
Longwood, FL

Gabe - skepticism is healthy, especially in our market - am I right?  The things noted in the blog post are leading indicators so it takes time for them to filter into our daily lives.  Note also that it is national data, so being in Florida, we are likely a bit behind that curve. =0)

Dec 01, 2009 01:49 AM #2
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

I've actually been surprised to hear some builders advertising new homes for sale.  Been quite a while since anybody has been building.

Dec 01, 2009 01:52 AM #3
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Chris Brown- Florida Home Loan Specialist | Certified Mortgage Planner

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