[quote=flu]I never thought that a tax credit would have generatde so much demand…Boy was I wrong about that.[/quote]

As a practical matter, it didn’t. New home sales, even during the end of the tax credit period were dismal, still significantly lower (in number of units sold) than any time in the last 60 years, save for a handful of months. (Note, thats months, not years. A handful of months out of the last 720 months, probably longer.)

The market hasn’t responded sharply because it’s not news.

New home sales won’t move much until there is demand. There won’t be demand until there is a shortage of resale homes. Seems unlikely that will be any time soon, in most markets.

It’s all part of the puzzle. Working backwards here, there can’t (or won’t) be inflation unless there is a robust recovery, which probably can’t happen unless there is very healthy job creation. As a practical matter, there can’t be healthy job creation until there is an increase in new home construction spending. From that point backwards, see above.