While smaller builders are taking the brunt of the price increases, the big public builders may actually be taking advantage of them. Knowing that supplies are low and demand is high, some are limiting sales in order to keep prices high.
(Read More: Housing "Stuck" Due to Short Supply)
"We are pricing our homes and limiting the number of lots we're releasing for sale in some communities to better manage our order volumes relative to our production capacity, and to maximize our profit from those communities," wrote Meritage CEO Steven J. Hilton in the company's quarterly earnings release.
Meritage is not the only one, as limited supply of new and existing homes pushes prices higher across the nation. It may seem counterintuitive to stop building in such a scenario, but apparently it is making business sense.
(Read More: Housing Recovery to Face Test as Builders Report)
"Many builders are starting to limit production," noted Megan McGrath of MKM Partners. "I think raising prices is one part of the equation, but I also think there is the issue of limited labor and finished lots at play."
With the housing crash so deep and prolonged, the big builders may have been caught off guard by the swiftness of new housing demand. Few predicting the inventory shortfall, and it is still unclear how long that shortfall will last. Builders are in the business of selling homes, but they also need to be in the business of staying in business and delivering to shareholders. If slower production amid rising demand equals higher prices, then that may just be the new normal.
—By CNBC's Diana Olick; Follow her on Twitter
@Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC
Questions? Comments? RealtyCheck@cnbc.com