Sellers are putting more unbuilt or incomplete homes on the market

• In the market for newly built homes, an unusually high percentage of sales has been for homes that were either under construction or not yet started.

By the numbers: According to July new home sales report released on Tuesday, the Census Bureau revealed that the inventory of new homes available for sale climbed 5.5% month over month to 367,000 units in July.

• This is the highest level of new homes for sale since November 2008.

Yes, but: A record low — just 9.8% — of those homes were completed. In other words, most of the inventory was still under construction or not yet started.

• "This implies that people can't see much of the inventory in the new housing market," Neil Dutta, head of economics at Renaissance Macro Research, tells Axios.

The big picture: There’s no shortage of evidence that suggests the elevated total inventory of new homes for sales belies the fact that demand for homes remains very strong.

• The median price of a new home sold in July was a record $390,500.
• During the month, there were 689,000 single-family homes under construction, the highest level since July 2007.

"Sure, we are not seeing desperate buying behavior like earlier in the pandemic, but builders still have plenty of homes to build," Dutta says.

• The much bigger market for existing, or previously owned, homes also has inventory of just 1.32 million units available for sale.

The bottom line: While an unbuilt home is technically something that a seller can sell, it’s usually not something that many buyers will buy.

• "What happens when the home is finally completed?" Dutta says. "It is sold in less than four months! So, this is tight and perhaps one reason why prices are still running quite firm."