national new home constructions 2013 end of year

End of the year new home sales released today. So a great time to look back and ask the perianal question  “Has single family new construction nationally recovered?”

You would think that after eight years from the peak that would be an irrelevant question at this point, unfortunately not. Since 2005 which was the peak in the building cycle interest rate has dropped -37.12% from 6.33% average in 2005 to 3.98% average for 2013. In any “normal” economy (whatever that is now) that type of shift would have home sales explode. Yet from 2005 that peak year we see single family permits down -63%, single family starts down -62% and single family sales  down -67%, and employment in residential construction off -42% from its peak. So the thought to ponder is how could we be here  rather than an explosion in sales.  I would venture a guess employment would be a leading culprit,  at the peak working age 25 to 54  there were approximately 101,000,000 people working, now there about 95,000,000 million working in that age group meaning 6 million fewer prime home buying age group not working, not a recipe for success. Add all the harder qualification our friends in Washington D. C. have added , my belief you get the explanation.

So thoughts to ponder…………………… when do all those people find work and when does rational regulation return to loan qualifications?