The U.S. housing market is still suffering from a significant supply/demand imbalance. In the half decade to 2006, there was a significant housing construction boom (adding to supply) that was not matched by sufficient population growth (limiting the demand side of the equation).

Although short & medium-term issues such as interest rates and even the sub-prime market influence the U.S. housing landscape for now, demographics can ultimately also play a role.

The influence of this factor has waned somewhat in recent years in the U.S. as housing excesses have muddied the water, but the historical record is clear that demographics must ultimately determine the amount of housing stock in the U.S. market.