One of the last vestiges of the too many homes argument is the shadow inventory. Foreclosures yet to hit market. I tend to be flippant about this type of thing because foreclosures do nothing to change the basic fact that we have a certain number of buildings and a certain number of people.
So, if the people are growing faster than the buildings we are either stuffing more people into the same buildings or we are going to run short on buildings. There is nothing magical here.
In any case, in the long run you like to see all of the indicators telling you the same things. I would like to see rents rising, home prices at least stabilizing and for sale inventory declining.
Indeed, we have all of those.
Case-Shiller Home Price Index
Months of supply at the current sales rate
And lastly stealing from Calculated Risk: Shadow Inventory Estimates