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Why are new home sales consistently lower than single-family housing starts? Does this mean a huge inventory of unsold homes is building up?

April 26, 2017consistently Home HOUSING huge lower mean sales Starts

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Why are new home sales consistently lower than single-family housing starts? Does this mean a huge inventory of unsold homes is building up?

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No. Houses built for rent, houses built by a general contractor on the owner’s land, and owner-built homes are not included in new home sales. Therefore the number of new home sales is consistently lower than total single-family starts or completions. Roughly 20 years ago or so, this represented 40 percent of starts, today the number is closer to 20 percent of starts.