WHEN YOU MISTAKE A FRAUD CRISIS FOR A BUBBLE:

The housing market crash that began in 2006 was devastating to many homeowners. But it was also a huge problem for builders. Many had overextended themselves and got caught holding the bag when housing prices eventually fell more than 30%.

That period left some serious scars. So builders pulled back in a big way. Housing starts in the U.S. went from 2.3 million in January 2006 to 490,000 by January 2009:

We simply stopped building enough homes in this country following the housing crisis.

There were roughly 210 million people in the United States in the early 1970s, and they were building more than 2 million houses a year. There are now 330 million people, and last year there were less than 1.3 million houses completed.

This number is now moving in the right direction, but years of underbuilding have taken a toll. A massive flood of new homes is required to catch up to current demand.

Mike Simonsen of Altos Research notes we now have the lowest inventory of listings on record. As recently as 2015, there were as many as 1.2 million homes for sale in the United States. That number is now closer to 260,000 for the entire country.

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