Chart: Today's Big Housing News Looks Really Pathetic in Context

More

The big non-Supreme Court news this morning comes from another hard-to-read, highly-watched, and slow-moving American institution: the housing market. Sales of single-family homes -- which non-economists often call a "house" -- surged 7.6 percent to the highest point since April 2010.

Home building is expected to contribute to the economy for the first time in seven years, Reuters reports.

But here's the chaser: Seven years ago, in 2005, new home sales were four times higher than they are today. A combination of foreclosures, underemployment, market uncertainty, and tighter credit has created a oversupply of previously-owned homes. And as this graph from Calculated Risk makes clear, we are still a long, long way from normal -- not to mention the abnormal highs from the mid-2000s.

Screen Shot 2012-06-25 at 10.42.57 AM.pngIf there's cause for long-term optimism, you can find it, somewhat ironically, in last week's dismal news that multifamily households rose by 1.9 million between 2007 and 2010, as adult children and elderly parents moved back in with their Gen-X and Boomer relatives. In those three years, multifamily households grew nine times faster than overall households.

Why's that good news in the long run? Because it suggests a major bottleneck in demand for housing. Even if the economy never achieves break-away 5% growth or something like that, young people will move out of the basement eventually and settle in apartments, condos and single-family homes.

>

Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

Why Are Americans So Bad at Saving Money?

The US is particularly miserable at putting aside money for the future. Should we blame our paychecks or our psychology?


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In