by Calculated Risk on 6/09/2013 09:50:00 PM

An interesting article from Nick Timiraos at the WSJ: Housing's Up, but Is Foundation Sound?

The housing-market recovery is here but there's a growing debate among bulls and bears over how long it will last ...
...
Population growth will require 14 million additional housing units this decade, around three-quarters of them single-family homes, according to Zelman & Associates, a research and advisory firm. Analysts at Zelman estimate that only 5.7 million of those units will be built by 2015, meaning the U.S. would need to add two million homes a year over the last four years of the decade—spurring a big boost of construction that would ripple through the economy.

"There's just not enough shelter," says Ivy Zelman, the firm's chief executive.
...
Joshua Rosner, managing director of Graham Fisher & Co., draws attention to several forces that had helped housing—and the economy—expand over the past few decades but whose end will now hinder growth.

Mr. Rosner first highlights the end of the "democratization" of credit. On the way up, lenders extended loans on better terms to more borrowers during a period in which interest rates were also declining. ... Housing and consumption enjoyed a one-time boost as baby boomers moved from one-income to two-income households during the inflation spells of the 1970s and as those consumers entered their peak consumption years in the 1980s. Those forces fueled homeownership, renovations and second-home buying.

Now, those tailwinds are becoming headwinds, Mr. Rosner says. The democratization of credit ended during the bust, and a new period of much tighter credit standards has replaced it.

I don't expect 2 million units per year at the end of the decade, but I do think the housing recovery will continue.

Weekend:
• Schedule for Week of June 9th

The Asian markets are green tonight with the Nikkei up 2.9%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are down 2 and DOW futures are down 16 (fair value).

Oil prices have moved up a little recently with WTI futures at $96.14 per barrel and Brent at $104.65 per barrel.