Summary: September housing starts were weak, as they have been since the crash. Their failure to recover has been a surprising and large drag on this economic cycle. Demographic change and slow GDP prevent a housing recovery. On the other hand, housing busts create recessions; this slow expansion (without a boom) is more sustainable — and might run unusually long.
September housing starts were weak, -15% YoY NSA (year-over-year, not seasonally adjusted) and -9.0% MoM SA. The weakness in this key industry is one facet of secular stagnation. How weak is it, compared to past expansions? See this graph of annual housing starts per 1000 people. After 7 years of economic expansion, starts run at less than half of the previous peak (Jan 2006), and two-thirds of the average during the previous two expansions. They rose to the 1963-2007 lows – and stalled.
