Housing Starts & Unemployment

If you have followed my blog, you will know that I am a housing advocate and believe that “as housing goes – so goes the economy”.

Year                            Housing Starts                        Unemployment Rate (%)



1979                            1,745,100                              5.9

1980                            1,292,200                              6.3

1981                            1,084,200                              7.5

1982                            1,062,200                              8.6

1983                            1,703,000                            10.4      Housing starts jumped dramatically



1988                            1,488,100                             5.7

1989                            1,376,100                             5.4

1990                            1,192,700                             5.4

1991                            1,013,900                             6.4      Savings & Loan Industry caused recession

1992                            1,199,700                             7.3

1993                            1,287,600                             7.3

1994                            1,457,000                             6.6



1999                             1,640,900                            4.3

2000                             1,568,700                            4.0      No housing reset due to low interest rates

2001                             1,602,700                            4.2

2002                             1,704,900                            5.7



2006                             1,800,900                            4.7      Fannie & Freddie started a downward spiral

2007                             1,355,000                            4.6

2008                                905,500                            7.7

2009                                554,000                          10.1

2010                                587,600                            9.8

Est. 2011                                                                  9.4?

      Fannie Mae                710,000

      NAHB                       575,000

The economy would need to add 125,000 new jobs per month just to keep up with population growth

The economy needs to add 1,400,000 new housing starts every year just to keep up with population growth and family formations.

Our current housing problems were caused by many but none more than the period from 1999 – 2002 when housing should have been reset with the economy.

The shortfall in housing starts from 2008-2011 will cause a spike in housing starts similar to 1983. Of course, the economy has to gain substantial strength and jobs created to lower the unemployment rate. This all has to happen to achieve a reasonably good year in housing during 2012.

Housing is shaping up to be a significant shift from a buyer’s market to a seller’s market “over night”. The last wave of foreclosures prolonged our housing slump but when this inventory is exhausted, the trends will shift quickly.

Be ready for the spring of 2012!