by Glenn Busch
July 19, 2011
Increased starts and permits are good for immediate construction jobs and a boost to the economy but the benefits will be short-lived if these new homes just become more supply. The major factor weighing the housing market down is excess supply and not enough demand. The new household formation rate needs to be higher than housing starts and so far it is.
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by Glenn Busch
June 16, 2011
In March of 2010 the twelve month run rate of new household formation was 357,000, however; the expected rate in 2011 is between 750,000 and 1 million. If the new household formation rate meets 2011 expectations then there is more than enough demand to soak up the existing and new supply. If household formation is lower than expected or stays close to 2010 levels then the housing sector is in for some pricing pains.
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