Wednesday, February 18, 2009

THE U.S. Housing Market

As of 2007, there was one housing unit available for every 2.35 persons in the United States. As of 2007, around 5.61% (7.19 million out of 128.20 million) of housing units were newly constructed within the previous 4 years. Around 10.22 % of housing units (13.11 million out of 128.20 million) in 2007 were technically ‘vacant’ (they were either just vacant, or were meant for occasional use).This data shows that in 2007 an equilibrium between the number of available housing units of good quality, the U.S. population, and the average size of an American household was approaching. Even as housing starts were proceeding at a hectic pace, occupation demand for new units peaked out, with more than 10% of existing units being technically vacant.Increasing inventories, decreasing starts, flattening home prices, and unwinding of highly leveraged housing investments marked the market adjustment to this new equilibrium.In 2008, the correction over extended itself, leading to a general implosion of credit in unrelated sectors. A housing recovery is on since December 2008 with falling inventories, and increasing sales volumes. My guess is that home prices will just stabilize somewhere, and mortgage credit will gorw very slowly, allowing further re distribution of home ownership over time rather than a further rapid expansion of the supply of homes in the U.S.
Data Summary:As of 2007, there were 128.20 million housing units in the United States. Of these , 13.11 million units were vacant. Owners occupied 75.65 million and renters occupied 35.05 million units. Of the 13+ million units considered vacant, 2.94 million units were for occasional use. So it seems that holiday homes, etc are included in that 13+ million as ‘vacant’. As of 2007, out of the total 128.20 million units, 7.19 million units were newly constructed within the previous 4 years. Around 8.71 million of these units were mobile/manufactured homes.As of July 01, 2007 the population of the United States is estimated to be 301.29 million and as of July 01, 2008 the population estimate is 304.06 million.Dividing the 301.29 million population by the 128.20 million housing units, you can conclude that there was one home for every 2.35 persons in the United States as of 2007.
Data sources:Housing units data:American Housing Survey:2007(U.S. Census Bureau) to page 16 in the PDF file, enlarge to something like 200% and have a look at the bold line in Table 1A-1: Introductory Characteristics - All Housing Units)
Population Estimates data:
U.S. Census Bureau, Population Estimates Program, American Factfinder:
(The population estimates are in the table at this page above)

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