There’s finally some optimism about the housing market as prices, sales and construction have all begun to rebound. But how far does housing have to go to get back to where it was? And will it ever get back to that level? N.C. State University economist Mike Walden responds.
“If you look at the housing market — particularly in terms of construction — it’s really ridden a rollercoaster. In the 1980s and 1990s, before the big housing boom, we were building about 600,000 housing units per year. At the peak of the housing boom, we were up to building 1.4 million housing units per year. And then, of course, we had a housing crash. And at the bottom of the housing crash, we went down to building … only 300,000 units per year, less than half of what we did in the normal period before the housing boom.
“Now we have had a rebound today. We’re up to building about 400,000 units a year. I don’t think we’re ever, ever in the near term, going to get back to that 1.4 million units a year. I think probably what’s more realistic, as long as the housing market continues to recover, is we head back to the 600,000 to 800,000 unit range.
“So we are, I think, going to have a rebound in construction, but it’s going to go back to maybe more normal construction that we had before the housing boom. That housing boom, I think, was really a once-in-a-lifetime phenomenon.”