Take a look at the chart below from Northern Trust, via Barry Ritholtz's Big Picture. The fact that the real estate market has been a major driver of the US economy recently is not news, or shouldn't be. But I did not appreciate before how much of the market was for new homes, not just homes. As you can see from the chart, which tracks new 1-family homes for sale since 1965, the number on the market today is just extraordinary. Although the numbers by themselves do not say anythingabout where these new houses are located, I wonder if that steep climb after 2001 marked a steep rise in urban sprawl as well, showing that the GOP's and Greenspan's loose money and deregulation policies will have harmful long-term environmental as well as financial effects.
But what about home sales, you might ask? Well, go to the Big Picture for better coverage, and you will see that with inventories of new homes at record highs, prices, sales and mortgage applications are all falling.