Once again, sorry for the thin gruel Iâ€™ve been dishing out that last couple of weeks. By next week I should be shoveling the prodigious chunks of cheese, corn, cheese-infused corn, and corn-encrusted cheese bits youâ€™ve come to expect from this establishment.
I did notice that the headlines are shouting about another big drop in â€œnew home sales.â€ Like this article, for example.
Apparently the number of Americans buying brand-spanking new homes is a major indicator of our economic health. Or to be more exact, the rate of growth in the sales of brand-spanking new homesâ€¦ is. (By the way, when swatting your child is criminalized in this country, as a bill introduced in Massachusetts a few months ago would have done in that state, will we be compelled to describe something that has just been constructed as â€œbrand time-outing newâ€?
Anyway, I always wonder about the assumption that an ever-expanding number of Americans are going to build new homes when I juxtapose it with the fact that we are very close to zero population growth. In fact if it werenâ€™t for the robust birth rates of Hispanics (legal and otherwise) we actually would have a shrinking population, as this graph by John Derbyshire reveals. (You need to know that the all-important replacement rate to at least maintain a population is 2.3 children per household.)
So given a static number of households, just where is this demand for new homes supposed to come from? Are upwardly mobile couples who want a new house in the exurbs going to simply abandon their existing homes in the suburbs if they canâ€™t find a buyer?
If everyone is going to be on a never-ending climb up the property ladder, you need a steady stream of people who want to jump on the bottom rung. Donâ€™t look to illegal immigrants. They send the lionâ€™s share of their money back â€œhome.â€ (Noticed all the Western Union moneygram storefronts proliferating in the â€œtransitionalâ€ areas of the city, lately?)
Given the easy credit and low interest rates that have been in place for a couple of decades now (you know the ones that have fueled the sub-prime loan â€œcrisisâ€?) pretty much every apartment dweller that is remotely interested in owning a home has one.
Whatâ€™s the answer?
How about revising our assumptions about sales of new homes? I realize that some of the fastest growing companies in AmericaÂ over the last few years have been the big national home builders.
But maybe those days are over. And maybe the big builders chains should get into the remodeling business.