Housing Starts Graph - A Great Illustration

This is one of the best graphs on housing starts

The average is about 1,600,000 housing starts per year since the 1950’s using the top and bottom ranges (red lines).

If you consider the 1,600,000 starts as the top of the range since the 2,000,000 housing starts represent an overheated economy proceeding a recession. Using a different top of the range as being reasonable, the new average would be 1,200,000 housing starts per year. This is also consistent with the number of new homes needed to keep pace with population and to replace the number of homes demolished each year.

The new norm is really the old norm …………… 1,200,000 homes per year.

After each recession, the number of new homes built has increased substantially until the Great Recession! We are lingering  below the bottom range and well below the norm.

In previous posts, I have outlined what has happened to the housing industry and what will happen to the housing industry. Sorry but it doesn’t end well.

Again, I am not an expert and I hope that I am wrong but housing will stall with higher prices, higher interest rates, low inventory and weak demand. This will be the norm for many years. The good news is that local markets rule rather than national trends.

Millennial’s will have to stay in their parent’s home for a long time and stay on the fence for even a longer time.  

Baby boomers will age in place.