To put this in context, the $2.3T drop is for the prior six months. In the prior 36 months (including the six months with this drop), the housing market posted a gain of $13T, a gain of approximately 40% (based on the peak valuation of $47.7T from the article).
While it may signal some cooling, housing is still substantially less affordable than it was pre-pandemic.
* edited to correct the time frame, 36 months not 24 months.
Correct, and be aware that pricing generally has momentum. Increases on prices put pressure on buyers to bid higher, and sellers to hold out for more.
Sudden decreases put pressure on buyers to hold off (it will be cheaper next year), and sellers to either hold off on selling (we’ll wait for the next boom), or in rare cases panic sell ASAP if they need to liquidate due to some weird life circumstance (divorce, death, unexpected emergency move and can’t afford to keep it, etc).
So price decreases are likely to have two different types of effects depending on the ‘part of town’ you’re looking at.
The rich part can wait out boom/bust cycles (generally), so inventory will dry up and prices will stay high because no one will be forced to sell and take a loss - but most potential buyers will also be less willing to buy as the prices are even more ridiculous (relatively) than they were before.
The poor part of town will have significant inventory increases and major price drops, as people have to sell more often due to job changes, financial hits, etc.
Overall sales volume will drop across the board, as financing is harder to get - which it being easier is really what caused the boom, and it being harder is causing these overall shifts too.
I'm always confused when I see the claim that anyone can "wait it out" when it comes to housing. Rich people still get divorced, suffer job losses, trade up, retire, etc. And they're more likely to be able to stomach a drop in value as they've owned longer and even if they haven't they can actually bring money to the table.
The vast majority of people in the country who own residential real estate did not purchase it in the last few years. If the "value" of their home doubled and then dropped 20% they really aren't going to care, regardless of the mortgage rates.
And beyond all that, there are always going to be people who have to sell, whether they bring money to the table, still have a profit, use a short sale, or what have you. And those sales will still set comps for entire neighborhoods. I'd love to see some concrete examples of rich neighborhoods "holding out" during downturns as I simply do not believe that has ever happened.
Rich people wait things out all the time, they have options. If the couple thinks the estate in Atherton is worth $15m, but market says $10m, they can horse trade so whoever wants it keeps it, or put it in a trust, or whatever.
If someone holds that property and dies, they’ll have a trust setup for it already, and almost no one will be in a rush to lose $5m liquidating it right away.
Anyone owning a place in Atherton (who bought recently) doesn’t have a ‘job’ in any every day person sense, and certainly isn’t relying on a paycheck to pay the mortgage. You literally can’t even get a conforming mortgage for those places.
Someone can (and will!) go full Kanye eventually of course, if it’s a big enough area, but those are few and far between and there is a LOT of pressure to not screw up the neighbors comps.
They’re often weird, special places anyway, so many games can be played. A friend of a friend lives there and his neighbors include a member of the Saudi Royal family, and a prominent VC LP.
That kind of wealth means there is no rush to lock in losses, and plenty of reason to pretend they haven’t happened - as usually, prices go back up.
It’s going to be easier to rent too than a terrible place in a terrible part of town.
If you’re poor? No one has those luxuries. Hell, many times no one can even afford lawyers!
Trying to buy into Palo Alto in ‘09-11 was impossible. No price drops, even less inventory, almost no volume at all. Atherton was laughable, there was even some price increases.
Sunnyvale? Near 101 (the ‘bad part’), prices literally halved. I know, I bought one. Most of San Jose was similar.
The closer you got to Los Altos/Campbell, the more frozen and ridiculous it got.
Most of sunnyvale had movement. A LOT of San Jose turned over.
I’ve seen the same thing play out in other markets of course, and know professional real estate investors.
The writing has been on the wall for YEARS pre-pandemic. Hell, good luck finding anything that would even cashflow for renting in the entire state of CAlifornia even by ‘18.
I think your definition of "rich" is more my definition of "ultra wealthy", but even so I don't think the rich want to be landlords. We're still talking feelings rather than data.
As far as anecdotes go the news media is full of stories of the ultra wealthy taking a bath on residential real estate in downturns. Sure, they might hold onto it for a year or so with an outrageous asking price, but they're also going to cut that asking price by 25-50% at the drop of a hat in my experience.
I'm not really all that concerned with the real estate habits of the ultra-wealthy. Like most people (even on this site) I'm more concerned with general trends in neighborhoods with less than 2 swimming pools per property. And I just don't think those neighborhoods are going to hold out to the extent that values will not fall and properties won't be available for purchase. That's a myth, IMHO.
Those aren’t the ultra wealthy, they’re .01%’ers. The ultra wealthy (of which a couple are familiar names like Bezos or Musk or Gates, but most of which don’t want to be known as it brings unwanted attention), pretty much never sell. Maybe if they’re rebalancing their portfolio somewhere.
They also wouldn’t be landlords (in the sense you’re talking about), that’s what they hire people for.
If the property is irritating them and they can’t offload it, then sure some won’t bat an eye at losing a couple million (or 10) on something. Most of them would stab their own mothers in the back for $100 though. But most of them literally never need to care to that level.
In the Bay Area at least, the 1%’er wealthy areas like Palo Alto? Most of the city just… stops. I’ve seen it myself last downturn.
You don’t need to be ultra wealthy to not need to sell if you hit a rough spot for a few years.
Yeah, agree that generalizations like "rich people will hold out" don't really hold true when you zoom in on individual home sale scenarios. Yes, the uber wealthy may wait, but those with a W2 often move for a number of reasons related to job, family, health, economic, or other life circumstances that trump the prevailing wisdom of what they should be doing. And then there are those who aren't paying attention or don't care. People want what they want.
It's just the better choose to wait it out, even if you get divorced, fired, etc. It's the more optimal financial play to treat housing as an asset, and because the US has proven historical to have a wildly fluctuating housing market. If you want to sell, and know waiting 4 years could net you a free $500,000 bonus, why wouldn't you
You'd prefer to share ownership of a property with an ex-spouse, potentially for years, rather than sell for the market price? I don't think most would agree.
There are just as many examples of real estate stagnating or depreciating over the course of 5 years as there are it appreciating by $500k. We shouldn't treat the last 10 years as typical for any residential real estate market. It wasn't that long ago that a typical real estate cycle was 17 years peak-to-peak. The Fed can't intervene and keep rates artificially low and buy up tens of billions in mortgages each month forever. In a market where a cycle is 17 years, 5 years at the beginning of a downturn is nothing. And that's wasted opportunity, especially for experienced investors.
Literally seen those scenarios you’re saying never happen, happen. Hell, I held a property for years with an angry ex-spouse because the market was doing well.
We both did really well on it - she’s still angry though.
To put this in context, the monthly payment for a million dollar loan (something that is almost a necessity in the big cities mentioned in the article), at 3% was 4200/month, but at the current rate of 6.75%, it is almost 6500/month, a more than 50% increase.
And if you're a buyer, it's even harder because nobody wants to sell right now, particularly established homes. It's mostly just new (and tiny) units/townhouses/apartments.
The sellers can’t sell either because the next house will have a disproportionate loan amount compared to what we’ve been paying. I’m in this situation and it is just keeping inventory low and listing prices high (for the few houses on the market).
> The sellers can’t sell either because the next house will have a disproportionate loan amount
I dont have the numbers but most houses dont have loans specially old people houses who want to downsize or kids want to sell because their parents have paswed away.
On the other hand most majority of buyers need loans which is expensive in a high interest scenario.
Why would investment properties be selling when rents are going up?
You graph actually proves my point, amount of people with mortgages is increasing aka buyers need loans while old people who are selling who bought their properties 20-30 years back dont have loans.
I was under the impression that Australia doesn't have the 30-year fixed-rate mortgages that the US has. I assume this leads to having less of a locked-in real estate base?
Most people have variable-rate home loans. In the past few years, fixed five-year loans have become more common. Basically you're on a fixed rate for the first five years, and then after that you're onto a normal variable rate.
Most economists here predict house prices will fall further as people sell due to mortgage stress. At the moment it looks like most people are hanging on. Historically speaking, interest rates are still pretty low. And I think people are reluctant to sell due to fear they won't get a decent price, and that if they wait a few years house prices will be back up.
In theory yes, but in the most populous states we also have large stamp duty taxes that get charged every time you buy a house that lock people in. For a $1 million house I bought this came out to ~$40k. In general people usually renovate their houses or stay inside houses that are way too big for them instead of moving into one that better fits them.
What's mental is that people buying $1m houses aren't anywhere near rich. That's just how much houses cost now. You spend years saving, and then the Government pinches most of your deposit!
In general, we have variable rate loans, though you can choose fixed rates for a certain period (usually 1-5 years). So yes, it should be more liquid than the US.
I'm afraid the housing market might remain severely distorted for a long time, even after the rates continue to shoot up.
As someone who bought a "starter home" years before the pandemic at rock bottom rates in the SFBAY, these new rates have made me reconsider my next steps. I originally planned to sell and upgrade at some point in the future, however, this is making less and less sense as rates continue to shoot up. It makes no sense to trade a mortgage well below inflation for a much higher one at an even more inflated price per square foot, with a higher tax bill to boot.
My rate is locked down for the remainder of the loan, and I'm still well above water even as the market cools. I know I'm not the only one in this position, and it's definitely contributing to the lack of inventory, keeping prices higher than they should be.
It's interesting because it'd actually be very much in the banks self-interest if you did take your mortgage and transfer it to a better home that is now the same price as your original loan amount.
Presumably a home in the same area that is valued now at a time of high interest rates the same as your current house was during the time of low interest rates will be a nicer home. Having the higher valued home as collateral is a benefit to the bank.
I am also in this situation and it basically makes no sense to move. So I'm stuck here until something changes. I think 30 year mortgage rates need to be below 4% before anything makes sense for me.
Maybe in the short term, but eventually, their vendors will need to lower prices. Specifically, the landowners. This would be expedited if we had a land value tax that made it more expensive for land owners to just sit on unproductive land.
Of course, due to prop 13, California has the exact opposite situation where landowners are rewarded for sitting on unproductive land.
You can sell it, you just do not yet have sufficient incentive to sell for a low enough price. If you have a job loss and cannot keep up with mortgage payments, then you would have to sell it, and the house would sell at some price (in most areas).
One little anecdote, many HUD loans are coming to the end of COVID government-sponsored CARES act forbearance periods and some of those may be eligible for 40 year refinance options, both extending the terms of mortgages and lowering monthly payment amounts.
I have no idea the volume here, but I'd venture to guess it's substantial, partly why inflation has been so bad, and may lend it's hand to a soft landing and not a dive off a cliff. But just my humble two cents.
I take Zeihan with a grain of salt, but his thesis that "children were free labor for farms, but are expensive poodles for yuppies in crowded houses" rings so true.
Kids distract from the modern, busy, downsized life. They're a major time and financial burden, and they only add headache. You can't make them do meaningful work for you. They get in the way in ways that were impossible a century ago. You can't hop on a plane, take off after work, or shut them away and have them mind their own business. Not like on a farm, where kids could roam free, learn independently, and help with the mountain of chores.
This is tongue in cheek, of course, but there's definitely some truth to the calculus of whether or not to have children. And it's on everybody's minds.
That explains why parents don’t have tons of children anymore (well, also dual-income houses are a thing, and it’s just not feasible to manage the lives of more than 2-3 children to middle class standards with both parents working). But it doesn’t explain why people have to delay children so long, which likely does reduce overall fertility rates.
I think it’s good that children are not viewed as an investment (note this is still the case in many cultures where communal living/financially supporting your parents is expected). But if it means fertility rates falling to drastically low SK/Japan levels we have to explore policy solutions.
> But it doesn’t explain why people have to delay children so long, which likely does reduce overall fertility rates.
I think it's much the same reason. When children are viewed as a giant economic and lifestyle cost, a lot of people will delay until they feel more ready. As things like good family housing become proportionally more expensive, it makes sense that people will want to wait until they feel more financially established in their careers and lives that they're comfortable taking on that kind of debt. And on the lifestyle front, there's more than ever that DINKs (dual-income no-kids) folks can spend their ample money and free time on, making having kids an even larger perceived opportunity cost. Why have kids in your 20s when you can't afford a house and can spend your time as a couple traveling or whatever when you can have kids in your 30s instead when you feel like you can better afford it and are maybe ready to settle down, or so the thinking goes for a lot of folks.
I had kids young. First one at 21 and my 2nd at 23. Now I am done having kids. Talking to friends, a lot of it is, it is a major financial burden. Now in their mid to late 20s, they are waiting because they hope in the future to be more financially stable.
Now my person opinion. Unless your a millionaire, your never financially "stable" enough to have kids. It is going to kick you in the "balls" one way or another. Rather it is affording diapers (not so steep) or child care (almost take a whole pay check for many people) or medical. With that said, there is a degree where if I had to do it over, I may have waited.
Under 10. I am not quiet yet 30, so my oldest is 7. But yea, medical is no joke. Not even just the actual medical bills. At my current job, I pay about $1k a month just for them to have insurance. The company covers my premiums, but barely anything if I have dependents.
> it doesn’t explain why people have to delay children so long
it does; people want to wait until they're more financially secure/stable before having kids given the costs of raising children, and they are less likely to reach that stability until well into their 30s
As a parent, sure, seems about right. That said, these days I think it's more about having them around when you are old, rather then when you are young. Perhaps they seem like a burden now, but I sure will appreciate two doting daughters when I'm an old curmudgeon.
> but I sure will appreciate two doting daughters when I'm an old curmudgeon.
Fingers crossed. My worry(?) is that any children I potentially have would move across the country (or world) and be fully occupied / overwhelmed by their own lives.
I am a child that did this. While for some it might be permanent, for others it can just be temporary - I moved back for a year while my father dealt with a terminal illness.
From my perspective, my mother can visit me just as well as I can her - I shouldn’t have to live by where she chose to live if it doesn’t work for me (and it doesn’t - the job opportunities stink and even if I did work remote, there is just a big cultural clash between me and that area). Once parents retire it is just as much on them to relocate close to me as it is I to them.
When I think about my desire to have children, I frame it in terms of them getting what they want, rather than sticking around like a pet.
Before marriage, I made sure my partner agreed with me that if we had kids, we would not act as if our kids owed us anything. I did not want to bring people into this world just so they can work for me.
If they want to, and we happen to live near, then great. If their goals take them elsewhere, then that is great also.
If the birth drops below 1 per person (or 2 per couple), the decision to not have children may have only positive consequences for the present, but has serious implications for the future. Of course, those implications could be positive - we may figure out how to be as comfortable, fulfilled etc. with less human labor. Even so, the long term consequence of a global shift to a non-replacement birth rate are substantial (and also, duh, long term).
My youngest son graduated in 2020. Two and half years later, my wife and I moved to Florida to a resort community for six months and we fly around the US the other six months. That’s definitely true.
This is not crazy - and it, along with better birth control worldwide, is why many researchers are predicting a population peak in a couple of decades.
I think more than housing prices need to come down for that to happen. We'd need young people to not be living pay-check to pay-check. To echo the other comment, this isn't the pre-1900's where children were mostly self-sustaining free labor.
In the UK, the average savings (net financial wealth) at 25 - 29 years old is £3,800, but the typical person in that age range has -£100. The average UK savings for 30 - 34 year old's is around £14,500 of net financial wealth (savings like current and savings accounts, stocks, bonds, etc. less financial liabilities), but the median figure is just £1,000.
By the time anyone is in a financially secure enough position to have children, they're at the stage where they're spending thousands in fertility treatment.
Big assumption there. Prices have fallen moderately so far (in some places) but mortgage rates are up which means there's still an affordability problem.
If prices were to "come back to earth" it would likely take a pretty serious recession to get us there (something akin to the '08 GFC) and that means even less people able to afford to buy.
The only two ways for prices to move substantially lower are to increase supply (build a lot more units) or reduce demand (have lots of people not in a position to buy).
Not many people talk about Japan when it comes to housing. They seem to have evaded all the unaffordable housing problems that the rest of the world deals with.
House prices are low, rents are low, population density is high.
How do they do it? Can we do that in the US or the rest of the western world?
Home price to income ratio in japan is like double the USA so that certainly doesn't look like an advantage. And that's with them having the huge advantage of declining population. Their population is lower than it was in 1995! US Population increased 25% since then.
If they did evade anything, they pretty much have housing on easy-mode by default because of demographics alone. Obviously places like that exist in the US, look at St. Louis. Or some of the rust belt. But nobody is going to think those places figured out something clever.
Maybe I'm naive, but it seems obvious: smaller plots, denser arrangements, and better zoning rules. Plus I'm pretty sure money isn't cheap in Japan and land is primarily bought in cash.
Still, in the US land/housing is pretty cheap... outside of the popular areas. I'm not saying this to say everyone should just move out of cities, but to show that it's not an American issue, but an urban American issue. Our current rules do not scale into urbanism.
Frequent Earthquakes make housing a rapidly depreciating asset in Japan. Homes are torn down and new ones are built all the time which is why they have such interesting architecture.
Instead of making eathquake proof houses they tear down and rebuild? Doesn't sound right. I thought the rapid depreciation is because of some government policy.
I'm on the fence with telling my realtor to hold off for a few months. I have been looking to do a bit of an upgrade.
I thought I was in a hurry, but the economics are absolutely ridiculous right now. Some sellers are still clearly on drugs - 300+ days on market with zero price reductions in sight.
Not sure if related, but I noticed a lot of the (empty) investor-owned homes in my area are falling behind in basic lawn care and other maintenance. One side of my street is going to be reclaimed by nature in a year or so if someone doesn't start living in these things properly.
A lot of young people (in particular) are understandably despondent at the state of the world. Saddled with student debt, fearing medical debt and having no hope of being able to afford housing in the current market. Some of these people understandably are hoping for some 2008-like crash as a kind of reset. It's their only hope other than winning the lottery.
It isn't coming.
There is now a confluence of interests to make sure that never happens. It's an alliance of homeowners and investment funds. Homeowners have a tendencey to become NIMBYs to protect their house values. For some this is now generational wealth they're creating. These presence of institutional investment funds are just adding to this to create a permanent renter class.
Some markets are soft but we don't have a vast amount of unqualified buyers. Nor do we have massive unemployment. These are really the only things that could drive a sharp fall.
This is the natural outcome of a capitalist organization of the economy. Every aspect of your life has become or is becoming financialized as the need for ever-increasing profits are going to extract every last dollar from you. Debt is quite literally built into your existence.
Not sure your part of the country, but I've never had a shortage of qualified tenants throughout the last 4 years. Why would "lost cash" be the driving factor of rent rates, rather than "local rental market rates"?
Many corporate landlords will likely increase rents because they know people renting can't buy as well. So they sure are stuck with what they currently have.
Except the higher interest rates actually makes the mortgage much less affordable.
Monthly repayments over 25y:
£300k mortgage at 2% = £1271
£250k mortgage at 5% = £1461
This loan would have to drop to £218k before the monthly payments became the same. That's a 27% drop before affordability even reaches the same level as before.
In the US interest payments are tax deductible (it’s a bit complicated because there are cliffs and limits involved) which lessens this.
For me personally I max out the SALT deduction which is barely less than the standard deduction, so most interest payments would be “discounted” by my highest marginal tax rate, which is a lot. Basically you end up with a 30-50% discount on mortgage interest in some cases
Yeah, and those are probably all homeowners, and will be skewed more towards those with higher incomes and larger home prices (ie those who are buying in the current market). So basically people on this website who are looking to purchase a home are much more likely to be itemizers/would itemize once they buy a house.
The notion that lower interests rates make it more affordable to own homes is a pernicious way to subsidize a specific class a people: those who can afford housing.
What does lower interest rates have to do with lower rents?
Taxpayer subsidized interest rates simply transfer future taxpayer money to existing land owners, similar to how taxpayer subsidized educations loans transfer money from future taxpayers to educational institutions and their staff, via excessive tuition prices.
If the government wanted to help someone buy a house, it could do one or more of the following:
1) build more houses
2) pay someone to build more houses
3) give people cash so that they can buy houses.
Houses can be abodes of any kind, including apartment, condo, townhouse, detached house, etc.
> What does lower interest rates have to do with lower rents?
Interest rates affect repayments. Higher repayments mean that the rent an owner is willing to accept will be higher (or, they won't enter the market).
Your whole model seems a little strange to me. Keeping rates low/stable is not a housing subsidy; it's about keeping the entire economy growing at a sustainable rate.
Keeping rates artificially low/stable is a subsidy, to keep asset prices growing at a rate that matches people’s expectations so there is not any political unrest when people’s 401k and pension and house price does not end up where they think it should.
My model is about helping people acquire a home they can live in. Which means having a home available for them to live in, and giving them cash to obtain it.
Using taxpayer funded loans is wholly unnecessary to accomplish that, and is a wealth transfer from non land owners to land owners in the long run.
Why not simply provide a subsidy directly to that subgroup that can now afford houses because of lower interest rates instead of providing massive benefits to those who can already afford? Not to mention second homes, etc.
We are subsidizing the well-off to allow some subgroup to afford owning homes while excluding the poorest from getting any benefits.
Lower interest rates are categorically not lower prices. A rich person can make low interest rates go exponentially further than a poor one; lending and borrowing is the game of the wealthy.
Whenever I hear 'lower interest rates' this and 'lower interest rates' that my scam radar goes off. It's a dogwhistle for "I want to take out $200K loans again for free."
People need higher interest rates, but more than that they need them over a sustained period of time, not reactive hikes that just screw everyone over. ECON 101: you lower them in bad times, not when selling pictures on your phone is one of the most profitable endeavors (i.e. the market is stupid hot). A cushion is useless if it's deflated before the fall.
It never is, last time a lot of the housing supply ended up concentrated in Blackrock-esque kinds of companies, I don't expect anything different from a next crash.
This article does a pretty good job of addressing the big companies investing in housing. They're not helping, for sure, but not the root cause of the shortage, either.
The difference is, with the risk free rate so high, investors buying up housing might not be as attractive as when rates are 0.
We’ll need to check back in after the next three hikes and Powell applies max pain by holding the rate up as long as possible (driving down asset prices).
Not really. Lower values, essentially reduce the incentive for builders for build new housing. This was a big reason why post 2008 building rates were so low.
Right. Part of the inflation in housing is driven by core inflation in housing inputs: materials, labor, etc. In most of the US market (outside of Cali), housing costs roughly track building prices. Some of this has cooled, hence the market cooled off. But fundamentally, we are very far from a "housing crash" because the market is far from saturated with inventory like it was 2008.
Oft forgotten fact of 2006 is that people were buying multiple new builds in their subdivision for speculative purposes. Because they thought they could flip them in six months for a 30-40% profit. To have a crash, someone needs to buy at inflated prices and lose their asses.
Progress toward affordable housing looks more like every boomer who did buy a house early dying and transferring their wealth to numerous gen x kids, and subsequently having marginally less political influence.
Probably out of water. Florida and Arizona may have problems that are the exact opposite of the other. Florida, too much water, Arizona too little water.
Fundamental setup is worse than the 2000s bubble in many ways (for different reasons). But even a 30% drop would only take us back a few years this time, so there is a nice cushion, yes.
Many still believe the various news pieces about a housing shortage, just as most people in 2005 were totally complacent. Only time will tell, but worth revisiting in 3-4 years
> Many still believe the various news pieces about a housing shortage
Have you got a solid argument against this? Just the demographics are pretty stark. Millenials are the largest generation ever and we simply did not build any houses for them.
The millenial "hump" you're referencing just recently passed the average age for a first-time homebuyer. Demographics move strongly against housing demand going forward (without change in immigration policy).
The amount of overbuilding in 2000s compensates for underbuilding in 2010's. The housing shortage is a complete myth... the only thing there was a shortage of was active listings. There is no structural shortage that is provable by any hard number. There's a lot more to say regarding housing market fundamentals, but just answering your question directly
> Demographics move strongly against housing demand going forward (without change in immigration policy)
The housing demand is greatly variable by location across the country. It is possible that there is increased demand in fewer places even though overall demand is lower.
Yes good hard numbers. The problem is many still consider it a shortage because they think that hoarding their starter home when they've moved on to home 2, and 3, and so on means a shortage still. The hoarding has in fact led to a shortage of homes available to buy. Why would they sell the accumulated properties when they are ramping up in value significantly each year, and only recently took a almost insignificant claw-back. If they all just continue the seller's strike, they can hold on to the value. We need to increase the holding cost of vacant properties significantly I believe to make a dent in actual affordability.
You’re reading both of those key statistics backwards. Household formation is the result of housing supply. The most noticeable outcome of the shortage is the suppression of new household formation. The fact that the homes per household ratio is similar to what it was in 2000, when the crisis was already well underway, doesn’t prove that we have enough homes.
The other stat should be read as an all-time low in construction completion. Houses under construction is a terrible thing to celebrate. They started more than they could finish with the labor and materials available. Not great.
Housing units/person is roughly the same as year 2000 too. Slightly lower, nothing that can possibly be asserted as a shortage. (which you had in your previous comment, but deleted for some reason)
Demographics matter a lot, yes, not just population. 5 year olds don't buy houses. Elderly dying sell their houses. But even using that number shows no shortage.
Back up your assertions with facts or don't participate at all please. This is how misinformation about a housing shortage has spread so virally. I've already engaged in the same circuitous conversation 100 times though, not worth engaging again. Check back in 5 years and we'll see what happened
For your first figure to work out, as there being more than enough housing, requires that any one unit of housing is equivalent to any other one and does not account for what an acceptable vacancy rate to facilitate moves would be in specific markets. An available unit in Kansas does not help the family in California.
When will YIMBYs listen? We need to tear down more housing! It's a matter of simple supply and demand, not some complicated conspiracy theory about government economic policy choices, interest rates, and financial shenanigans.
While it may signal some cooling, housing is still substantially less affordable than it was pre-pandemic.
* edited to correct the time frame, 36 months not 24 months.