BUT ALREADY AT RECESSION LEVELS ANYWAY
We went back to look at new home inventories since 1963. Rather than using the raw numbers, we've indexed them here to December 2007, the official start of the 2008 recession. The shaded areas are recessions.
What this chart shows is that every time the index level reached 100 - except for right now - the economy was in recession. Inventories did not reach that level - again except for now - without being in a recession. And only two times, in1970 and in 1990, were recessions without housing inventories reaching the 100 index level. Both of those recessions were caused by high oil prices in combination with war. Granted we have those too now, but we are already at that Dec 2007 index level anyway.