A Historical Perspective On Housing Starts
That year of 1977 was a momentous one for housing, with starts reaching an all-time high of more than 2.14 million. (All data cited here comes from the National Association of Home Builders and combines both single-family and multifamily units.) That was followed by another terrific year in 1978, with 2.02 million housing starts. (Housing would reach the 2 million-level only one more time, in 2005, when 2.07 million new homes were built.)
1979 saw a decline to a still respectable level of 1.75 million units, after which a severe recession took hold and starts plummeted as follows:
1981: 1.08 million;
1982: 1.06 million.
Recovery saw housing starts shoot up to 1.7 million units in 1983, and that began a string of good if unspectacular years for housing that lasted until 1990, which began three consecutive sub-par years of 1.19 million starts (1990), 1.01 million (1991) and 1.2 million (1992). After that, housing was off and running, peaking in 2005 and followed by another strong year in 2006 with 1.8 million starts.
How far have we fallen? Consider that last year housing starts totaled only 906,000 units. That was the first time since the 1940s housing has failed to top 1 million units, including that steep recession in the early 1980s.
This year’s starts are crawling along at a pace below 600,000 units. And keep in mind our population has grown by about a quarter since those dark days of the early ’80s.
David Kohler gave the keynote address at the 2009 ASA Convention during mid-October. He predicted housing starts wouldn’t climb above 1 million units again until 2011, and then would continue to limp along a little above that level for years afterward.
I was thinking, how far we’ve fallen when a year of 1 million housing starts is cause for cheer.