We are in a housing bubble and it hasn’t burst. History says it hasn’t burst. Housing starts for September 2007 were according to 868,000. Prior to 1997, 868,000 single family homes had never been sold in a given year in US history. Every day news we hear is fiction. In all years prior to 1997, the current housing starts would be considered a massive housing boom, something that would surely over heat the economy.

One must question the world news about it failure to elaborateon this subject of speculation and the fiction surrounding it. A bust is when housing starts fall to around 500,000 a year. In reality, that is where sales fall in a housing bust, at or below 500,000, meaning the starts need to fall well below that to clear the market of excess inventory.

I brought this up to someone a few weeks ago and they brought up population growth. I was stunned to hear somene think our population growth is something of historic proportions today, something that would induce a decade long sales trend with no let up at record levels of home sales. 800,000 homes a year being built had glutted every national housing market we have seen in the past 100 years. What is different this time?

I could understand the creative financing putting an extra couple hundred thousand units in the market for a couple of years, but the excess of the past 10 years is clearly in the form of 200,000 to 300,000 extra homes a year being built at a minimum. Population growth isn’t the driver of this phenomenon, speculation is.

I have a government report on the census bureau site.
housing start and under construction report

IF you examine this site, you might find that they left all data out prior to 2006. Go find some data prior to this speculative nonsense, that is prior to 1997 and see how out of shape the current bust is. It isn’t a bust, but a continued construction boom. What this means is the mortgage bubble and bust that will follow is getting bigger, not smaller. What is means is that housing continues to boom, depite all the financial problems surrounding the industry and all the downsizing news. Downsizing from what? Downsizing to what? Clearly a level of construction that constitutes a boom, not a bust or a working off of excess.

This could be why we haven’t seen a recession yet? These are figures every politician in history prior to Clinton would boast about, not something that would have people crying. It appears that we are being called on to bail out a boom, not a bust. One more crime of the day.

This goes to show how much over consumptionis being financed in the US. I could buy a system that produced this number of houses every year as something that might be desirable. But to call this level of construction a bust is an outright lie.