The focus of the U.S. real estate market lately has been the number of foreclosures and people trying to purchase cheap housing. But Brian Wesbury, chief economist at First Trust Advisors, says that if Americans don’t start focusing on building new houses, the market will have a much bigger problem on its hands.
"We need one and a half million houses per year just to keep up with population growth," Wesbury said in an interview with Steve Forbes.
Call me a stickler for focusing on the forest through the trees, but supply (months supply) and demand (restricted by access to easy credit) neither reflect a impending shortage or sustainable bottom in housing. Previous housing cycles suggest weakness until at least 2015, possibly much longer.
Months Supply And Change YOY:
U.S. Median Home Price (MHP) to Gold:
Source: forbes.com
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