One of my favorite sources of economics data is the Calculated Risk blog, I’ve been following it for about 10 years now. You can find the link to it here: https://www.calculatedriskblog.com/ The blog has been running since 2005, and has a wealth of hard data related to many aspects of the economy including the housing and mortgage markets. I really enjoy all of the data and charts they provide, which includes a lot of historical data so you put the state of the economy today in terms of a historical perspective. All too often I see financial news with a clickbait headline about some piece of data that is up or down, but lacks context. Looking at the data in terms of where a particular statistic has ranged over several decades gives a much better understanding of what is actually going on in the economy.
A few weeks ago they had a blog titled Housing and Recessions. It contained this chart that shows new housing starts going back to 1968:
What I found most interesting about this particular chart is that was a larger number of housing starts back in the 1970’s than there are today, despite the fact that our population is much larger now. I have some theories but don’t really know why this is the case. My main takeaway is if there is a relatively small supply of new housing coming online, that should tend to support housing prices, all other things being equal. The total residential investment as a percentage of GDP is also lower than it has been historically. So although housing prices have moved up there doesn’t seem to be overreach in how much money is being spent in the sector. The author of the blog mentions that overall he is not worried about the housing market at the moment, and he has also mentioned that repeatedly in his other posts. So while housing prices have been trending up over the last several years, a downturn in prices doesn’t appear to be imminent. As a note investor my takeaway is that it should be a while before a downturn in the market that would reduce the value of the collateral backing my portfolio.