New Housing Starts Ignore Demographics as Likely Buyers Dwindle

econimica.blogspot.com  ( Original )
JAN 25, 2018

ORIGINAL SOURCE: Rising Rates and Decelerating Deficits Spell Doom For Housing (Again) by Chris Hamilton at Economica on 1/22/18

There are many interplaying factors in determining housing growth and demand. Here are a few, reflected in the chart below.

  • Annual total US population growth (black line)
  • Annual 0-65yr/old US population growth (blue line)
  • Annual housing starts, 1-unit (red line)
  • Federal funds rate (dashed black line)

Note that housing starts now outpace the population growth of the group responsible for the vast majority of new home buying: everyone under the age of 66. This is unprecedented.

All other economic considerations aside, what could be a more basic and bearish supply/demand imbalance than this?

Please read the rest of the report here; Rising Rates and Decelerating Deficits Spell Doom For Housing (Again)