Banks Selling More Homes Than Homebuilders

July 16, 2010 No Comments »


Interesting little tidbit from the good people over at Housing Intelligence.

Based on their market data, banks and mortgage lenders have been selling more homes than homebuilders over the past year and a half.

In December 2005, the share of regular resale home sales peaked at 80 percent.

About a year later, in November 2006, new home sales accounted for nearly 20 percent of transactions, a peak share.

That’s about the time things went wrong, what with everyone trying to get in on the frenzy, utilizing things like option arms and zero down financing to get deals done.

At the same time, housing inventory swelled as builders put more and more units on the market in anticipation of a strong buying environment.

But just over two years later, in January 2009, new home sales slipped to a 14 percent share and REO sales eclipsed new homes sold.

They’ve since fallen to an 11 percent share, while REO sales have increased to 19.5 percent.

Bad news for both homebuilders and banks…oh yeah, and for homeowners.

Funnily enough, around that same time the National Association of Home Builders said housing inventory was too low, and blamed a surge of foreclosures for the mortgage crisis, not overbuilding.

Go figure.

Share of Home Sales

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