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These factors significantly contribute to housing supply and cost issues in the United States.
1. Growth in the total US housing stock has been muted.
The nation’s housing stock expanded 20 percent to 138 million homes between 2000 and 2018, but after taking population growth into account, the total housing stock has expanded only 3 percent and has actually contracted 0.2 percent since 2008.
2. Housing production is significantly less than its average between 2000 and 2003.
The years 2000–03 were the last generally considered normal (before the run-up to the crash). New housing production has increased 123 percent since 2009 but remains 28 percent below its 2000–03 average annual level of 1.87 million units.
Single-family starts and manufactured housing shipments remain 35 and 48 percent below their respective 2000–03 annual averages, but multifamily starts are 10 percent higher.
3. Private single-family construction spending per unit completed is elevated.
Over the economic recovery, private single-family construction costs on average have outpaced broader consumer inflation. On a per-completion basis, total spending in 2018, $344,701, was 70 percent higher than its 2009 low of $202,528. In contrast, consumer inflation has risen by 17 percent over the same period.
4. The number of multifamily units completed has recovered, but these units are in larger buildings.
At 348,000 the number of completed multifamily units in 2018 is 6 percent above its 2006 level. However, the number of completed multifamily buildings has fallen 60 percent over the same period. Multifamily construction spending per building reached $5.0 million in 2018, 186 percent above its 2006 level of $1.8 million.
5. As a share of gross domestic product, residential fixed investment (RFI) is highly variable and tends to lead business cycles.
RFI decreases heading into a recession and accelerates out of one. In 2018 and the first half of 2019, real RFI fell, sparking fears of a recession. But more recent numbers have partially alleviated these concerns.
Read the full article about housing supply facts by Michael Neal, Laurie Goodman, and Caitlin Young at Urban Institute.