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It will be interesting to see ongoing impact of 30 year rates on sales and starts over the next few months. I also wonder if the aftermath of Ian will do to supply chains in Florida and South Carolina. My best guess is a temporary spike in material prices, but no big disruptions. Granted, some of the stuff they'll be rebuilding shouldn't be rebuilt, but that's another story.

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Could the story be that builders are in a hurry to sell what they have completed or mostly completed, but they are not very interested in starting a lot of houses or doing a lot more work on them? What is the probability that sales fall off a cliff in the fourth quarter?

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There are contexts where something like that could happen, but I don't think it is an important element now.

One reason I think that clearly doesn't explain the current market is that the homebuilders all have massive backlogs of sold inventory with unusually long construction times. There are a lot of sold properties under construction. And, the builders would complete those in a day and close the sales if they could. They want to get those closed and in the books before the buyers can cancel the orders. The near-term revenue constraint you'll see for all the public homebuilders isn't sales. It's how fast can they get the sold homes finished so they can book the revenue.

I recently posted about Hovnanian, who actually said they are aiming to increase their speculative unsold units under construction, but since supply constraints have made it hard to even finish the sold units, they have had difficulty increasing their speculative inventory.

I suppose you could say that some builders may be focusing on finishing sold units and sandbagging the unsold units. But, still, as far as I can tell, every major builder is driving their supply chain bottlenecks at capacity.

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