Pulte Homes Inventory Bulges, Housing Starts Up
In today's release of financial data Pulte Homes reveals they expect demand to remain high. Inventory surged almost $2 billion, up 33% from one year earlier.
When a firm as big as Pulte homes decides to increase or decrease inventory, it probably takes years to steer the numbers in the direction they want. I have no doubt that the home builders thought they were making the right move two or three years ago when they acquired lots of land and started dozens of subdivisions.
The slow motion effect will haunt the sector as it will take years to slow down the trend. The housing starts came in 5% higher than expected suggesting the industry is ignoring the signs of a slowdown.