Every Homebuyer Must See This Chart! (Number of Homes Completed Every Year)
In the chart below, you can see that there were about 2.3 million new homes constructed in 1973 – a number we have not seen since.
This is not that big of a deal until you remember that the entire population of the U.S. was only about 211 million (compared to 332 million now).
Over the last year, we have built about 1.3 million homes, when, again, the U.S. population was over 330 million!
From 2010 to 2020, the average number of new homes built was around 1 million per year.
This is about half the pace of building that we saw from 2000 to 2010.
But – from 2010 to 2020, America’s adult population grew by 24 million people!
Why Is Big Money Still Buying Real Estate?
In this recent YouTube video, Joe Brown of Heresy Financial explains why the big funds are still buying real estate – despite ALL OF THE TALK ABOUT HIGHER RATES CRUSHING THE MARKET.
Mr. Brown uses the same chart I show above to illuminate this fact: our pace of homebuilding since the 2008 meltdown has not even come close to keeping up with population growth, relative to previous decades.
And this is why big funds like Goldman Sachs and Fundrise are still buying up entire housing tracts, per Mr. Brown.
So yes, higher rates will make the market less competitive and hopefully bring down list prices even. And yes, Fed policy and very low rates have helped to push up prices in the past.
BUT – the biggest reason so many people remain bullish on housing overall – is good ol’ supply and demand.
Building has been way down while population has continued to shoot up!
No Building + Growing Population = Strong Housing Market EVEN IF RATES ARE AT 6%!