New home sales increased by 71,000 in July, bringing the total number to an annualized rate of 739,000. Adjusted for population, this is 2.19 new houses sold per thousand people:
This looks pretty healthy: we're holding steady at the level from just before the pandemic. But if you zoom out and take a longer view, things don't look quite so sanguine:
With the exception of the tail end of the bursting of the housing bubble, new home sales are near all-time lows. And we're unquestionably at an all-time non-recessionary low. The only years with lower totals were 1981, 1991, and 2008-18.
Kamala Harris says we need to build more homes. That's true. We should get this number up to a steady rate of 3 per thousand, or about one million homes per year. Over a decade, this would amount to an additional 3 million single-family homes.
But—and say this quietly—all 3 million of those additional homes are needed in California. The rest of the country is mostly fine.
I live in a town of 20,000 in Washington state, and we could use several hundred units today just to catch us up.
You almost got there, but you blew it up right at the end.
We don't need 3M new homes, we need about 4.5M to 5M new homes. And we need them this instant. By the time we get that many built, we'll need more than that, so we should probably be shooting for 6M new homes.
And no, you don't need 3M homes in California. You might need around 1M, sure (California has just over 10% of the US's households, so it might not even need that many...). The rest need to be, well, everywhere else that people want to live, which is not just California. It's every big city, every medium city, and lots of areas within long-commute distance of every regionally-dominant city.
Why is this hard to understand? It's really basic stuff.
How do you get there? Also wondering where Kevin gets his numbers: How does he know we need ~ 3M? How does he know we need them just in California. How do you know he's wrong, that we actually need 6M across the country?
Not really arguing, but the only evidence I see adduced is Kevin's chart. I don't see what on that chart proves that we need 3M houses, but only in California.
Kevin is pulling his 3M from Kamala's campaign proposal to somehow build 3M homes.
My source on 4.5M homes is this Zillow data piece: https://zillow.mediaroom.com/2024-06-18-The-U-S-is-now-short-4-5-million-homes-as-the-housing-deficit-grows
Given that the housing starts chart looks like this (https://fred.stlouisfed.org/series/HOUST), it sure looks in the right ballpark to me. Honestly, 4.5M looks to be too low to fill in that big gaping hole in housing construction after the financial crisis/financing bubble (we didn't have a housing construction bubble), given that we need the trendline to be sloping upwards at the rate of population growth + the rate of necessary replacements for units. There are at least 10 years in that crater where we were short at least 500K homes. That'd be 5M.
Then factor in that people don't want to live in the same places as they used to (urbanization, really) and the "replacement" rate is higher than it would be otherwise...
Yeah, we need a fuckton more housing and we need it instantly. By the time we build 5M units in today's regime, we'll need more like 7 or 8.
+1
On the one hand, I've see how bad tract housing construction is. On the other hand, you can't have good for cheap so you end up with cheap bad. There's a lot of cheap bad out there that you can't see until something happens years later and the bad is exposed, long past any warranty.
It's better to live in a "tiny house"* that is well built than it is to live in a spacious but poorly built house.
You can, after all, only cut $/SF so much to make a house affordable before it becomes unbuildable. So, to get better quality you lower the SF. On the plus side, the fire life-safety reqs are looser, making it ever so slightly easier to lower cost for a tiny house.
* - reference to IBC Appendix Q, "Tiny Houses"
Build baby build… And given our changing climate, California is among the last states which should see a population increase…
Since this country is quickly headed for half a billion people - with no limit in sight - why not build 10 million homes each year?
Because there's no downside to more people (our infrastructure and natural resources can handle it) and greater densification, the future is bright.
Since this country is quickly headed for half a billion people
Complete and utter nonsense. Even the "high" end of century projections are well under that now. The United States just emerged from the decade (2010-2019) with the slowest rate of population increase in its history. Yes, even slower than the 1930s. And yes, this includes net immigration. Indeed, the Census Bureau expects the population of the United States to commence shrinking in the second half of the current century.
https://www.census.gov/newsroom/press-releases/2023/population-projections.html#:~:text=Total%20Population&text=The%20high%2Dimmigration%20scenario%20increases,lower%20than%20the%202022%20estimate.
I think this trend poses some very serious problems for America. I realize you don't share this view, but for the life of me I don't understand why you're not celebrating the country's plummeting rate of population growth. But you never cease to piss and moan about how you want it ratcheted down even further. Good grief. Some people are never happy.
The 30-year fixed-rate mortgage is rent control for the middle class.
You really need to factor in the aging of the population and overall slowing of population growth. The number of people in the prime new home buying age isn't increasing as fast as it was. You're starting in 1965, at the tail end of the baby boom. Subsequent to that for the next 30 years or so you're looking at baby boomers buying houses themselves. It shouldn't be shocking to find that the demand for new home construction is less now than it was then.
Census bureau data projects people in the 18-44 age group to increase by 14.4% from 2016 to 2060, while the population as a whole will increase by 25.2%. People 65 and older are expected to increase 92%. These older people will be starting to downsize and sell their existing homes. If there's a changing demand to be met, it seems to me that smaller homes for retired people is where it's at.
https://www.census.gov/content/dam/Census/library/publications/2020/demo/p25-1144.pdf
I suspect that’s somewhat misleading, as much of our population growth is driven by relatively young immigrants who need affordable housing.
Not just CA, though that’s where it’s worst. The MEDIAN price of a home in Seattle is now over a million. Here in Tacoma it’s not as bad, but our place has quintupled since we bought it in 1986. Good for us (other than the property taxes), but we could never afford this neighborhood if we were buying now.
We remodeled our house since we could not afford to buy anything in NE Seattle. Original cost was $325,000, remodel was $333,000. Current Zillow value $1.4 million.
We need more transit oriented mid rise and townhome developments for the next generation. My favorite model for this is https://youtu.be/MgcmC6Md6Fc?si=fM7zrpG7GOvM6Dgr
Same in metro Boston: now a cool million at the median for a single family detached home. That's fully ten times median household income for the region. There's no way that was the case several decades ago.
We need to massively increase home construction. I also think it would improve things a lot to implement Georgist land taxes, but that's probably a pipe dream.