The Wall Street Journal is running this story on the front page today (subscription may be needed to access story) highlighting the problems smaller builders are having in this housing downturn.
It turns out, at least according to the data source for this story which is The Federal Reserve and Foresight Analytics, Minnesota has one of the highest delinquency rates in the country for builders. See graph below.
New construction has been particularly hard hit during this down cycle, but despite the fact that building permits are down about 50% from the peak in 2005, builders need to continue to slow down their building and sell off what they have.
It doesn’t help the home builders when the cancellation rates continue at extraordinary levels. Dow Jones is reporting that the average cancellation rate for home builders is 43%.