New home inventories reach new low   

Seasonally adjusted new home inventory decreased to 6.5 months of supply in April from 7.2 months in March. The average months of supply over the last 45 years is 6.2 so even by this measure the housing picture is improving. The absolute inventory of new homes continues to fall and is now at 174 thousand, the lowest level seen since the late 1960's. Any recovery in the rate of sales would quickly deplete the low absolute inventory level and lead to a significant increase in housing starts (and freight) but that does not appear likely in the near term. The vertical bars in the graphs represent recessions.