But the biggest problem on the horizon is the swelling backlog of unsold homes: an eight-year-high of 6.3 months for existing homes and 6.1 months for new homes.
David Rosenberg, chief North American economist at Merrill Lynch, said there are 4.3 million condo and single-family homes for sale in the United States, up 37% on the year.
“Every boom, mania and bubble follows the same path,” Mr. Rosenberg said.
“What has undone everyone of these back to the tulips in the 17th century is a massive accumulation of unsold inventory once you’re past the peak of the cycle, and that’s exactly where you are with the U.S. real estate industry.”
The housing industry has been a linchpin of the U.S. economy since the tech crash and the 2001 recession.
The U.S. Federal Reserve slashed interest rates to 1% to rescue the economy but fuelled a building frenzy, especially in Florida, California, Las Vegas and parts of the East Coast.
The construction industry has accounted for more than a third of overall job growth in the past three years, Mr. Rosenberg said.
