Happy National Construction Appreciation Week to those who celebrate.
We’re supposedly building roughly the same number of new houses and apartments that we did in 1960 when the U.S. population was 180 million, i.e., roughly half of what it is now. St. Louis Fed:
During the intervening years we had an influx of about 80 million immigrants (Pew for 1965-2015 then add for the extra years before and after) and we are also home now to the children of those immigrants. How is it possible that we haven’t been building more houses in the aggregate?
One possible answer is that families are much larger today and, therefore, we have more people in the typical house or apartment. But 1960 was prior to the age of no-fault (unilateral) divorce. ChatGPT:
Another possible answer is that we have people living in tents, California-style. But Brookings says “Our calculations show that the U.S. housing market was short 4.9 million housing units in 2023 relative to mid-2000s”. I.e., if we assume a household size of 2, at most 10 million Americans and migrants are living in tents. (Note that this 10 million number is roughly comparable to the number of undocumented migrants who came across the border during the the Biden-Harris administration.)
A final possible answer is that we are living in shabby old houses. I asked ChatGPT:
Maybe this is good because it shows that we did such a great job building homes circa 1960-1980 that they’re not wearing out? ChatGPT says it is not good:
I can’t figure out how this happened. We are informed that migrants are skilled eager construction workers. Labor is 30-50 percent of the cost of building a single-family house. We are richer in migrants than at any time in U.S. history. Why wouldn’t we have at least the same ratio of housing starts to population size that we had in 1960 before we began to be enriched by migrants?
In fact, the New York Times says it is more or less impossible for us to have built any houses without immigrants: “How Would We Build Homes Without Immigrant Labor and Foreign Materials?” (April 1, 2025)
Related:
- “Yale Study Finds Twice as Many Undocumented Immigrants as Previous Estimates” (using 2016 data) reminds us that the above numbers on total population and immigrant population might be underestimates by roughly 10 million
> How is it possible that we haven’t been building more houses in the aggregate?
Housing starts are so expensive that builders create fewer, higher profit McMansions. I really wish they would go back towards functional vs. the latest pink granite countertop bling. That would require social engineering, and reversing the nature of real estate agents–a currently intractable problem. During the pandemic, many Millenials decided to reverse their position about urban living, and are flooding in to the suburbs–which isn’t helping.
After being layed off at Microsoft, my BIL is working on improving the housing stock of his city, kind of high quality flipping. More businesses like this, who find a way to make it profitable without shortcuts, would help a lot.
ChatGPT estimates that pre-construction costs for a single family residence are $56K in Jupiter, FL–this is permits, surveys, enviro tests, design, consulting, etc. Add $300K for a tiny lot, $30K for utility hookups, etc., etc. Much more expensive lumber for framing, post-pandemic and tariffs. I wouldn’t build a $1M econobox house there either. I saw a new home on Zillow there that was $800K and looked like a 2-car garage with a shack attached.
The auto blog poster still has yet to cover Jerry Greenfield finally quitting the Ben & Jerry business over selling ice cream to jews.
Phil, your thesis appears to be that there is a shortage of housing now vs. 1960, but Grok says that in 1960 there were 58.0m housing units and population of 180.7m and as of 2024 147.0m and 340.1m (excluding uncounted/illegals), respectively, so units per person has gone *up* from .32 to .43, right?
Confused: It makes sense that units per person has gone up because family size has gone down. But with units per person up while housing starts are at a low level we have the “we are living in shabby old houses” explanation from the original post.
Phil, the data totally refute your “we are living in shabby old houses” now vs. 1960: just ask Grok or think back to your childhood. No study or analysis would support the thesis that the U.S. housing stock now is “shabby” vs. 1960. A few examples:
1) 14% of housing units lacked indoor plumbing in 1960 (<.5% now)
2) 19% of homes lacked a full kitchen in 1960 (<1% now).
3) Density (people per unit) was .85 in 1960 and .45 now.
4) Heating systems were 15% coal/wood vs. <1% now.
5) Air conditioning penetration was 15% vs. 90% now.
And on and on…not even close.
Anon: I guess what you’re saying and the original post could both be true. The average age of a house has gone up from about 22 years in 1960 to about 44 years today, but a house built circa 1938 isn’t nearly as nice as a house built circa 1981.
Maybe all the desirable, practical locations have already been built up to capacity? And/or maybe “newcomers” are willing to accept a lower standard of living, by cramming 4 families into what used to be considered a single family house (zoning rules be damned)?
Jah. Housing assets are now mainly financial assets. Forget about housing people, these things are much more valuable as debt instruments. Lots of M3 and M4 value tied up in housing. Who pays M1 or M2 for housing anymore? The poor!
What is the economic definition of rent? Whose pension funds depend on high gains through manipulation of the housing market? How did Fred make a fortune building affirdable housing so Donald could skate through the unaffordable housing market? Who depends on the equity line on newly-erected uninhabited manhattan pencil skyscraper apartments?
Housing shortages are how the Aristocratic class keeps the Proles down. It is much more effective than hunger.
“Post‑capitalism” isn’t a formal economic stage but a way of describing a reality where the engine of the economy runs more on future claims than on present wealth [like running a gasoline engine on diesel]. In essence, substituting debt for capital creates a highly leveraged economy where growth is fueled by borrowing rather than by the accumulation of productive assets. After this transitional stage, most likely the economy will become either broadly socialist or narrowly oligarchic . — ChatFriedman
> Housing shortages are how the Aristocratic class keeps the Proles down.
I don’t know if I’d give them that much credit, seems like they just sip on Beefeater martinis, and let nature take its course. We are in some crazy chaotic economic-space.
One word: regulation.
Just 20 years ago, building a new home meant dealing with far fewer requirements. Today, even something as basic as meeting R-value will significantly drive up the cost of new construction or remodeling. And if you are building or remodeling a multi-family home with four or more units, you are required to install a sprinkler system. At least, that is the case here in Maskachu$etts.
Looks like cumulative # of housing units built between 1960 and 2025 is around 80 million ( I visually assumed that average 1.2 million new houses were built annually) Sounds about right for the population of over 300,000 people, around 4 per housing units on average. This also matches well will 40 years median housing age right now. Decline of traditional family with children seems to be a culprit. There were more housing units were built during baby boom era.
Native born population birthrates are plummeting, and most of the newcomers do not have wealth, and maybe prospects of building sufficient wealth withing next few years or maybe desire investing into US and not their native country, to qualify for regular mortgage, and US financial system still reels from risky mortgages of 2005- 2005 wrapped into mortgage – backed securities.
This is risky staff, could eventually lead to internal situations described in Austin Powers comedy as “difficult kriplakistan situation” on intelligence operative screen, if this continues.
My childhood home in the Boston suburbs was built in 1899: 3-story, wood frame, stone foundation, 1/1 in-law apartment on the first floor, 2-car detached garage added in the 1950s, 0.5 acre lot. Nice, clean, safe, family neighborhood and remains so today. My dad bought it in 1967 for $18K. Mom sold it in 1993 for $160K. Zillow estimates it now at $450K.
Yesterday, I walked by a house they built on a creek-side infill lot (seasonally you can have a Frank Lloyd Wright-style water feature living room). Anyway, this McMansion is only 2 years old, the satisfied new construction owner had resold it, and the new owner was ripping out all the flooring. Apparently, this is common now, people automatically changing the flooring when they move in. (The seller asked for $50K above what they paid, I guess for soiling it, but only got $25K.) I was tempted to have a close look at the carpet to see if it was water damaged. There was too much FOD in the form of laminate floor chunks coming from the windows for me to get close.
In the good old days, when homes were built by Muricans, I would see chaw juice between the wall studs in new construction, occasionally sunflower seeds. I’m afraid to look now, as I’ve occasionally witnessed their personal moments outside. It’s really weird that in almost every new home nowadays there is that one closet they assigned to the novato that has wallboard that is all wack and studs with structural nails bridging the gap to the top plate.
> “We need them. They’re building our houses—have been for 30 years. Losing the workers would devastate our companies, our industry and our economy”
Wait, didn’t gaining the workers cause some issues? I could go on and on, but my head hurts.
Young Americans, do your civic duty, spend some time in the trades.
@#AnonymousToo forget about Young Americans going to trade. With all the hype and AI trend , almost every young one i know stopped thinking and doing basic analysis. Every time they need anything or build a small Web application they run to Chatgpt or other AI tools.
ChatOldHouse?
They won’t pick vegetables, either. I don’t understand why, TwitX and Redidit are so much more boring. None of which require any analytical skills or Ivy League edukashion. Maybe this will all work out.
The younger ones stopped thinking or make sense of apply logic once GPS became commonplace. Reading maps, making sense of directions, or even knowing where North, South, East, and West are has quickly vanished. And, of course, smartphones and social media finished the job.
Smart Phones IV: A New Hope
There are pockets of resistance:
https://www.nytimes.com/2025/01/30/style/luddite-teens-reunion.html
In their snail-mail newsletter, they traveled to France to find the town of Seine-Port, which enacted a ban (I think subsequently rescinded) on cell phones in public places, using paper maps. Most of my in-laws’ kids, including teens, don’t use social media or smartphones–they prefer board games, playing guitar, and being outside.