Every now and then, we take a look at why the US housing comeback continues at a pace that has disappointed those of us who believed (and still hope) that a rebound in household formation will produce a self-sustaining acceleration in the broader recovery.
After the release on Thursday of disappointing housing starts but encouraging building permit numbers for April, we’ll do so again now. Start with this helpful chart from Capital Economics: Read more
James Sweeney of Credit Suisse has written one of the more optimistic (and convincing) notes we’ve come across about the near-term trajectory for US housing.
Its optimism is based mainly on its analysis of expected household formation growth, which Sweeney finds has been underestimated by most observers. The note includes a good discussion of the ways in which healthy household formation growth can have powerful multiplicative effects throughout the rest of the economy. We’ve covered much of this ground before, and of course don’t forget to follow Calculated Risk and Karl Smith, who anticipated these trends before anyone else. Read more