Courtesy of soberlook.com, June 22, 2014
The US is facing a new housing crisis. No, it has nothing to do with subprime mortgages or bloated home equity balances. This time the nation is dealing with shortages of rental housing, a problem that will become increasingly acute in years to come and may result in a material drag on economic growth.
Americans are simply not building enough homes to accommodate the population’s needs. The number of housing units completed per capita in the United States remains a fraction of historical averages. The slight improvements from the lows of 2011 have barely scratched the surface.
Similarly, in spite of recent increases, residential construction spending as a fraction of the GDP remains at the lowest levels than at any time since WWII.
At the same time demand has been on the rise. As an indicator, the chart below shows Google search frequency for rent related phrases.
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