The statistic from my headline can be found here at the U.S. Census. There were 1.7 million single unit starts in 2005
Single family home construction is at an all time low in 2011 going all the way back to 1959. The three next worst years? 2010, 2009, and 2008.
As I keep saying, this dramatic slowdown in housing construction is a key reason the economy remains so sluggish even though it is technically in recovery. We overbuilt new single family units and we simply are not creating households fast enough to significantly boost demand for new construction. With new construction at a low level, there’s less employment and wealth creation — which further depresses demand. A significant jump in housing starts in the absence of greater demand will simply put more downward pressure on prices. Talk about a catch-22.
We’ll slowly work our way out of this situation, but there are limited options in terms of policy. (Still, there are options, although most seem to be off the table politically.)
Multi-family unit construction also fell off a cliff in 2008 and 2009, but starts of buildings with 5 or more units rebounded smartly to 167 thousand in 2011 from 104 thousand in 2010. An encouraging sign.
Calculated Risk has more here.