Not only was that vision interrupted for millions during the housing crisis, but it may be outmoded. When investors parse economic data to see how close the U.S. economy is to getting “back to normal,” they must redfine normal.
One million housing starts is actually a modest level, even in a data series going back to 1959, and low on a population-adjusted basis. For example, rebased to the number of Americans in 1959, starts averaged 1.185 million through 2002 when the housing bubble began to inflate. The three-month average now stands at an adjusted 545,000.
In 1960, nearly three-quarters of adults were married, compared with barely half today, and people tied the knot six years younger on average, according to Census Bureau data. Furthermore, the fertility rate in 1960 was 80% higher, resulting in more babies born to a smaller population.
There is less need for self-standing suburban homes today and more for smaller, cheaper apartments.
The American Dream just ain’t what it used to be.
Source: The Wall Street Journal, June 17, 2014