US New Home Supply Hits Highest Since 2009, Signaling Weak Demand

The monthly supply of new single-family homes in the US surged by 1.0 month in May to 10.3 months, the highest level since February 2009. This metric measures how many months it would take to sell all currently available homes at the current sales pace. The long-term median for this indicator stands at approximately 6.0 months.

Historical data shows that six out of seven times this indicator has risen to current levels since the 1970s, the US economy was already in a recession. Elevated mortgage rates and record homeownership costs continue to deter buyers, leaving builders with growing inventories that are proving difficult to clear. The US housing market has rarely been this oversupplied.