Top 2011 Posts: Research on Pent-Up Housing Demand

With the end of 2011 approaching, the contributors of NAHB’s Eye on Housing thought it would be useful to take a look at the updates that attracted the most readers over the last year.

One of the most important stories of 2011 (and 2012) is the growning phenomenom of pent-up housing demand.

In February, an NAHB research paper quantified this “shadow demand.” Using Census data we estimated 2.1 million missing but expected households that have been delayed due to the Great Recession. 

As the economy and the job market improves in 2012, these potential households, now doubled-up and living with family members, will be unlocked, leading to increased demand for rental housing and eventually emerging as prospective homebuyers.



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  1. According to DSNews.com, there are currently 1.6 million properties in the shadow inventory. These range from seriously delinquent to REO not yet listed for sale. Everybody needs to get with the program and figure out a way to deal with the excess inventory problem because it is causing continuing declines in values and equity and putting more and more homeowners at risk of foreclosure. Declining values is also the reason “qualified” buyers are holding off their purchases because no one wants to pay more than they can get it for tomorrow.

    • actually the shadow inventories levels when considering the GSEs is significantly higher than the 1.6 mm you referenced. I’ve seen the number at twice this number from various sources. Your point is a good one, re housing values, but is misdirected re this post.
      Shadow demand addressed delayed housing formation and most of the shadow inventory is occupied. While it is difficult to determine unoccupied housing that is not second housing, we are truly building up shadow demand due to delayed housing formations and doubling up by families and relatives. Keep your eye on this number and job creation as a metric for when housing construction commences.

  2. Increase rate in number of households over the 2001-2006 low-interest rate real estate boom period hardly convinces me that this is a sustainable historical trend worth forecasting from…. please broaden the time horizon of the chart, and add demographic data like population increases and working population, otherwise this is a worthless chart.

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