The Commerce Department reported(.pdf) that housing starts fell 0.3 percent in October to an annual rate of 628,000 units and permits for new construction (a key leading indicator for the industry) jumped 10.9 percent to a rate of 653,000, however, as shown below, residential construction remains in a deep funk, current levels of home building now about one-third of what would be considered “typical” for the U.S. housing market (that is, if anyone remembers what “typical” is in this post housing bubble environment).
I wouldn’t be surprised if the 2009-2011 “flatline” shown above is extended for another few years or more. Home builders are now building about one million fewer homes per year than was their pre-housing bubble norm and there are probably about a million foreclosures per year set to hit the resale market and this should extend at least a few more years.
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[...] Tim Iacono [...]
Factors for a bad housing construction market:
1. More unemployment
2. More people sharing housing with roomates and family to cut costs.
3. A current massive surplus of existing housing.
4. Reduced population growth from immigration/births.
5. At least some lessons learned from the bubble (don’t overextend, don’t buy if you have to move anytime soon for any reason, you can’t really afford that home you qualified for, etc)