United States Housing, 2013

Delton Alderman

Research Note

FPL–RN–0340

United States Department of Agriculture

Forest 

Service

Forest Products

Laboratory

April

2016

© Sascha Burkard / Fotolia
Abstract

This publication provides an overview of the 2013 U.S. 

housing market, including updated information and data, 

and is part of an ongoing series of quarterly and annual 

housing reports that provide historical information on housing permits, starts, houses under construction, and completions. In addition, short briefs present information regarding 

house sales, construction spending and economic impact, 

demographics, affordability and financing, wood usage in 

housing, types of housing, and other factors that affect the 

U.S. housing market. The purpose of this series of reports is 

to present periodic snapshots of the dynamic U.S. housing 

industry. This publication is based in part on data produced 

by the U.S. Department of Commerce, Census Bureau; the 

National Association of Realtors; the National Association 

of Homebuilders; and the Forest Products Laboratory and 

Northern Research Station of the U.S. Forest Service.

Keywords: Housing, permits, starts, under construction, 

completions, construction spending

Contents

Overview..........................................................................1

Housing Permits...............................................................2

Housing Starts..................................................................2

Housing Under Construction ...........................................2

Housing Completions.......................................................3

Single-Family Housing ....................................................4

Multifamily Housing........................................................6

House Sales......................................................................8

Manufactured Housing.....................................................10

Residential Construction Spending..................................10

Housing as a Component of GDP....................................14

Components of and Factors Influencing

U.S. Housing in 2013.......................................................14

Affordability .................................................................14

Demographics...............................................................15

Financing ......................................................................16

First-Time Home Buyers..............................................18

Housing Age .................................................................18

Housing Construction—Framing..................................19

Housing Inventories......................................................19

Home Ownership..........................................................20

Housing Purchasers ......................................................20

Housing Size.................................................................20

Student Debt .................................................................20

Literature Cited ................................................................21

Glossary ...........................................................................23

April 2016

Alderman, Delton. 2016. United States Housing, 2013. Research Note 

FPL-RN-0340. Madison, WI: U.S. Department of Agriculture, Forest 

Service, Forest Products Laboratory. 23 p.

A limited number of free copies of this publication are available to the 

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United States Housing, 2013

Delton Alderman, Research Forest Products Technologist

Forest Products Laboratory, Madison, Wisconsin, and 

Northern Research Station, Princeton, West Virginia

Overview

The U.S. housing construction and sales markets marginally 

improved in 2013. Consensus housing projections indicated that 2013 would be a banner year for U.S. housing; 

these projections were overly optimistic. Although housing 

construction sectors improved on average about 20%, consensus forecasts overestimated these same sectors by nearly 

the same amount. In the first quarter of 2013, total permits, 

starts, houses under construction, and completions were 

substantially greater than recorded in the final quarter of 

2012; however, by year end the increases were only slightly 

more than at the beginning of 2013. Home improvement 

or remodeling spending also increased incrementally from 

quarter one through quarter four. A combination of factors hindered the construction and sales markets, including 

rapidly rising housing prices, escalating mortgage rates in 

the spring (the foremost season for housing sales), stringent 

loan requirements, declining real median incomes, and lackluster household formations. 
Research Note FPL–RN–0340

2

Housing Permits

Number of housing permits is valued as a forward-looking 

indicator that may provide an estimate of the future housing construction market. In 2005, at the peak of the housing boom, 2.155 million building permits were issued at 

a seasonally adjusted annual rate (SAAR), the most since 

1972. In 2013, issued permits increased by 19.4% over 2012 

(Tables 1 and 2; Fig. 1). For additional comparison, the average number of permits issued in 2013 was 30.7% less than 

the 1959–2008 average and 27.5% less than the 1959–2013 

average (Table 11).

Housing Starts

Number of housing starts is also a leading indicator for 

the overall housing market, because starts are generally 

regarded as integral in the creation of economic activity. 

Starts include new single-family (SF) and multifamily (MF) 

structures, which historically make up a significant portion 

of the U.S. gross domestic product. From a historical perspective, a record 2.068 million (SAAR) housing starts were 

recorded in 2005. In 2013, starts increased 66.9% from the 

2009 nadir (Tables 1 and 2; Fig. 1). Overall, starts increased 

steadily throughout 2013, with a few declines along the way. 

Comparing 2013 to long-term averages, starts were 39.7% 

less than the 1959–2008 average and 36.5% less than the 

1959–2013 average (Table 11).

Housing Under Construction

Housing under construction is generally considered as a lagging indicator for assessing the housing market but can be 

used to assess current construction employment and building material demand. Houses under construction increased 

steadily throughout 2013; yet the number was 49.2% less 

than in 2005 (Tables 1 and 2; Fig. 1). For further comparison, the 2013 housing under construction average was 

29.4% less than the 1969–2008 average and 25.4% less than 

the 1969–2013 average (Table 11). 

Table 1. Housing permits, starts, under construction, 

and completions, by year and by month (2013)a,b

Permits Starts

Under 

construction Completions

2000 1,592.3 1,569 933.8 1,573.7

2001 1,636.7 1,603 959.4 1,570.8

2002 1,747.7 1,705 1,001.2 1,648.4

2003 1,889.2 1,848 1,141.4 1,678.7

2004 2,070.1 1,956 1,237.1 1,841.9

2005 2,155.3 2,068 1,355.9 1,931.4

2006 1,838.9 1,801 1,204.9 1,979.4

2007 1,398.4 1,355 1,025.0 1,502.8

2008 905.4 905.5 780.9 1,119.7

2009 583 554.0 495.4 794.4

2010 605 586.9 411.0 651.7

2011 610.7 608.8 417.7 585.2

2012 829.7 780.6 532.5 649.2

2013 990.8 924.9 688.7 764.4

2013c

Jan 947 896 562 726

Feb 976 951 580 723

Mar 926 994 593 805

Apr 1,040 848 607 699

May 1,010 915 621 719

Jun 938 831 629 763

Jul 977 898 640 779

Aug 948 885 653 763

Sep 993 863 661 761

Oct 1,067 936 668 815

Nov 1,037 1,105 688 826

Dec 1,022 1,034 711 775 a

In thousands, annual and monthly data.

b

Data are for conventional housing and do not include mobile home 

shipments.

c

Seasonally adjusted annual rate.

Data source: Census Bureau (2014a).

Table 2. Total yearly comparisons, 2012 and 2013a,b,c

2013

Change 

year-over-year

(%) 2012

Permits 990.8 19.4 829.7

Starts 924.9 18.5 780.6

Under construction 688.7 29.3 532.5

Completions 764.4 17.7 649.2

a

In thousands, annual and monthly data.

b

Data are for conventional housing and do not include mobile home 

shipments.

c

Seasonally adjusted annual rate.

Data source: Census Bureau (2014a).
United States Housing, 2013

3

Housing Completions

Number of housing completions indicates the quantity of 

houses finished and available for sale or rent. Normally, 

completions lag starts by 5 to 6 months. Analysts may use 

these data to develop sales estimates for consumer-based 

products, such as furniture and home appliances. Housing 

completions were mixed in 2013, with November recording 

the greatest number (SAAR basis) of completions for the 

year (Tables 1 and 2; Fig. 1). Comparing long-term averages, 2013 completions were 50.1% less than the 1969–

2008 average and 46.9% less than the 1969–2013 average 

(Table 11). In 2013, completions were 61.8% less than the 

2,100,500 recorded in 1973, the most completions recorded/

reported since data collection began. 

Figure 1. Total housing permits, starts, under construction, and completions, 

2000–2013, in thousands. Data source: Census Bureau (2014a).

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Permits Starts Under construction Completions

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Research Note FPL–RN–0340

4

Single-Family Housing

In 2005, at the apex of the housing boom, 1.682 million SF 

building permits were issued (annual rate, AR); SF permits issued in 2013 were 63.1% less than in 2005 (Table 3, 

Fig. 2). Assessing SF starts, the high-water mark was nearly 

1,716 million (AR) units in 2005; SF permits issued in 

2013 were 64.0% less. In 2013, there were about 65% less 

SF units under construction than in 2005 (929.1 thousand) 

(AR). In 2005, there were 1.654 million (AR) SF completions recorded; 65.6% less completions were estimated in 

2013 (Tables 3 and 4; Fig. 2). 

In 2013, SF permits increased by 19.4% over 2012, and 

19.7% year-over-year. From January to December 2013, 

SF starts increased 9.2% (SAAR) and 15.4% year-overyear. In the same time frame, SF houses under construction 

increased 17.7% (SAAR) and 19.3% year-over-year. SF 

completions also improved from January to December, a 

1.9% (SAAR) increase and 17.8% year-over-year (Tables 3 

and 4; Fig. 2). Note that SF completions normally lag starts 

by 6 months to a year.

Contrasting 2013 data and SF long-term averages, 2013 SF 

permits issued were 33.9% less than the 1959–2008 average 

and 30.9% less than the 1959–2013 average. SF starts were 

43.4% less than the 1959–2008 average and 40.5% less than 

the 1959–2013 average. SF units under construction were 

43.9% less than the 1969–2008 average and 40.4% less 

than the 1969–2013 average. SF completions were 48.4% 

less than the 1968–2008 average and 45.1% less than the 

1968–2013 average (AR) (Table 11). 

Table 3. Single-family (SF) housing permits, starts, 

under construction, and completions, by year and by 

month (2013)a,b

SF

permits

SF

starts

SF under

construction

SF

completions

2000 1,198.1 1,231 623.4 1,241.8

2001 1,235.6 1,273 638.3 1,255.9

2002 1,332.6 1,359 668.8 1,325.1

2003 1,460.9 1,499 772.9 1,386.3

2004 1,613.4 1,611 850.3 1,531.5

2005 1,682.0 1,716 929.1 1,653.9

2006 1,378.2 1,465 764.7 1,654.5

2007 979.9 1,046 579.1 1,218.4

2008 575.6 622.0 377.3 818.8

2009 441.1 445.1 283.1 520.1

2010 447.0 471.2 247.3 496.3

2011 413.6 430.6 221.6 446.3

2012 518.7 535.3 267.7 483.0

2013 620.8 617.6 319.4 569.1

2013c

Jan 597 618 288 557

Feb 611 650 293 569

Mar 605 613 294 591

Apr 622 591 302 529

May 624 597 306 560

Jun 627 601 313 541

Jul 616 596 316 579

Aug 631 617 320 569

Sep 617 582 323 563

Oct 625 603 322 604

Nov 645 710 330 593

Dec 617 675 339 568 a

In thousands, annual and monthly data.

b

Data are for conventional housing and do not include mobile home 

shipments.

c

Seasonally adjusted annual rate (SAAR).

Data source: Census Bureau (2014a).

Table 4. Single-family (SF) yearly comparisons, 

2012 and 2013a,b,c

2013

Change

year-over-year

(%) 2012

SF permits 620.8 19.7 518.7

SF starts 617.6 15.4 535.3

SF under construction 319.4 19.3 267.7

SF completions 569.1 17.8 483.0

a

In thousands, annual and monthly data.

b

Data are for conventional housing and do not include mobile home 

shipments.

c

Seasonally adjusted annual rate.

Data source: Census Bureau (2014a).
United States Housing, 2013

5

Figure 2. Total single-family housing permits, starts, under construction, and 

completions, 2000–2013, in thousands. Data source: Census Bureau (2014a).

200

600

1,000

1,400

1,800

SF permits SF starts SF under construction SF completions

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Research Note FPL–RN–0340

6

Multifamily Housing

In 1972, 1,185.8 million MF building permits were issued 

(AR), the greatest number ever recorded. MF permits issued in 2013 were 68.8% less than in 1972. Assessing MF 

starts, the high-water mark was 1,047.4 million (AR) units 

in 1972; MF starts in 2013 were 70.7% less. In 2013 there 

were 39.7% less MF units under construction than in 1972 

(929.6 thousand) (AR). In 1973, there were 903.3 thousand 

(AR) SF completions recorded; 79.5% less completions 

were estimated in 2013.

In 2013, MF permits increased by 17.6% over 2012, 17.6% 

year-over-year. From January to December 2013, MF starts 

increased 26.6% (SAAR) and 25.1% year-over-year. In the 

same time frame, MF houses under construction increased 

36.6% (SAAR) and 39.4% year-over-year. MF completions 

also improved from January to December, a 22.0% (SAAR) 

increase and 17.4% year-over-year. Note that MF completions normally lag starts by 6 months to a year (Tables 5 and 

6; Fig. 3).

Contrasting 2013 data with long-term MF averages, 2013 

MF permits issued were 24.6% less than in the 1959 to 2008 

period and 20.8% less than recorded for the 1959 to 2013 

average. MF starts were 31.4% less than in the 1959 to 2008 

period and 27.3% less than recorded for the 1959 to 2013 

average. MF units under construction were 9.2% less than 

in the 1964 to 2008 period and 4.8% less than recorded for 

the 1964 to 2013 average. MF completions were 56.9% 

less than in the 1969 to 2008 period and 54.2% less than 

recorded for the 1969 to 2013 average (AR) (Table 11).

Table 6. Multifamily (MF) yearly comparisons, 

2012 and 2013a,b,c

2013

Change

year-over-year

(%) 2012

MF permits 370.1 17.6 314.6

MF starts 307.0 25.1 245.3

MF under construction 369.3 39.4 264.9

MF completions 195.3 17.4 166.3

a

In thousands, annual and monthly data.

b

Data are for conventional housing and do not include mobile home 

shipments.

c

Seasonally adjusted annual rate.

Data source: Census Bureau (2014a).

Table 5. Multifamily (MF) housing permits, starts, under 

construction, and completions, by year and by month 

(2013)a,b

MF

permits

MF

starts

MF under

construction

MF

completions

2000 394.2 338 310.4 334

2001 401.1 329 321.0 332

2002 415.1 346 332.3 315

2003 428.3 349 368.6 323

2004 456.6 345 386.8 292

2005 473.3 353 426.8 310

2006 460.7 336 440.2 296

2007 418.5 309 445.9 325

2008 329.8 284 403.7 284

2009 141.8 109 212.3 301

2010 157.0 116 163.8 274

2011 197.1 178 196.2 155

2012 267.7 245 264.9 166

2013 370.1 307 369.3 185

2013c

Jan 350 267 265 159

Feb 365 291 278 147

Mar 321 356 289 209

Apr 418 243 294 164

May 386 307 304 149

Jun 311 219 306 208

Jul 361 283 313 192

Aug 317 255 322 189

Sep 376 271 327 190

Oct 442 322 335 199

Nov 392 386 348 221

Dec 405 338 362 194

a

In thousands, annual and monthly data.

b

Data are for conventional housing and do not include mobile home 

shipments.

c

Seasonally adjusted annual rate.

Data source: Census Bureau (2014a).
United States Housing, 2013

7

Figure 3. Total multifamily housing permits, starts, under construction, and 

completions, 2000–2013, in thousands. Data source: Census Bureau (2014a).

100

150

200

250

300

350

400

450

500

MF permits MF starts MF under construction MF completions

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Research Note FPL–RN–0340

8

House Sales

Existing house sales provide insight to the current housing market and are important for the home improvement 

industry and, by extension, the forest products industry. For 

the past several years, investors comprised nearly 30% of 

existing housing purchases (NAR (National Association of 

Realtors) 2014c), and these houses were purchased primarily to become rental units. In 2005, 7.076 million (SAAR) 

existing houses were sold; at the nadir of the housing crisis 

in 2008, the number of sales was 4.110 million (SAAR). In 

both January and December 2013, 4.870 million (SAAR) 

existing house sales were reported; contrasting 2013 versus 

2012, existing sales increased 9.2% year-over-year (Tables 7 

and 8; Fig. 4). 

New house sales are important for many reasons to the forest products industry, primarily because if new houses are 

not built and sold, demand for forest products decreases. 

New house sales in 2013 were mixed, with some of the 

lowest monthly numbers since new housing sales data were 

first recorded in 1963. The greatest number of new houses 

sold occurred in 2005, when 1.283 million units (SAAR) 

were recorded. In 2013, the monthly average was 430,000 

(SAAR) new houses sold. In January 2013, 442,000 

(SAAR) new house sales were reported, and in December 

446,000 (SAAR) were sold—a 0.9% increase in December over January. On a year-over-year comparison, sales 

increased 16.6% (Tables 7 and 8; Fig. 4). 

A comparison of 2013 new and existing house sales data 

to their respective long-term averages indicates that new 

house sales were 38.4% less than in the 1959 to 2008 period 

and 35.0% less than the 1959 to 2013 average. For existing 

houses, 2013 sales were 13.3% less than the 1959 to 2008 

average and 3.9% less than the 1959 to 2013 average (AR) 

(Table 11).

Table 7. New and existing house sales, 

by year and by month (2013)a,b

New house sales Existing house sales

2000 877 5,173

2001 908 5,333

2002 973 5,631

2003 1,086 6,176

2004 1,203 6,778

2005 1,283 7,076

2006 1,051 6,478

2007 776 5,040

2008 485 4,110

2009 375 4,340

2010 323 4,190

2011 306 4,260

2012 368 4,660

2013 430 5,090

2013c

Jan 442 4,870

Feb 448 4,950

Mar 440 4,960

Apr 452 4,990

May 431 5,150

Jun 459 5,160

Jul 367 5,380

Aug 379 5,330

Sep 399 5,260

Oct 450 5,130

Nov 445 4,830

Dec 446 4,870

a

In thousands, annual and monthly data

b

Data are for conventional housing and do not include 

mobile home shipments.

c

Seasonally adjusted annual rate.

Data sources: Census Bureau (2014b), National 

Association of Realtors (2014a).

Table 8. New and existing house sales, yearly 

comparisons, 2012 and 2013a,b,c

2013

Change

year-over-year 

(%) 2012

New sales 430 16.6 368

Existing sales 5,090 9.2 4,660

a

In thousands, annual and monthly data.

b

Data are for conventional housing and do not include mobile home 

shipments.

c

Seasonally adjusted annual rate.

Data sources: Census Bureau (2014a), National Association of 

Realtors (2014a).
United States Housing, 2013

9

Figure 4. New (left-hand axis) and existing (right-hand axis) house sales, 2000–2013, in thousands. 

Data sources: Census Bureau (2014b), NAR (2014a).

4,000

4,400

4,800

5,200

5,600

6,000

6,400

6,800

7,200

300

500

700

900

1,100

1,300

1,500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

New house sales Existing house sales
Research Note FPL–RN–0340

10

Manufactured Housing

Manufactured housing was a substantial component of the 

new housing market in the United States for several decades. For instance, from 1963 to 2001, manufactured housing shipments averaged nearly 20% of overall U.S. housing 

starts. Beginning in 2001, manufactured housing production 

registered a sharp decrease, averaging 147,867 shipments 

between 2001 and 2006 and 62,971 shipments between 

2007 and 2013. Respectively, this was 8.2% and 7.2% of 

total U.S. housing starts. From 2010 to 2013, manufactured 

housing has averaged 53,350 units per year (Fig. 5).

Residential Construction Spending

Private residential construction spending is also an important indicator for the overall health of the housing market. In 

2006 US$ 433.5 million (SAAR) was spent for new singlefamily housing and US$ 52.8 million (SAAR) was spent for 

MF housing. For improvements or remodeling, US$ 144.9 

million (SAAR) was spent in 2006, compared with 124.7 

million (SAAR) in 2012 (Table 9, Fig. 6). It should be noted 

the U.S. Census Bureau does not directly report remodeling 

expenditures, and thus outlays are reported as improvement 

spending (Tables 9 and 10; Fig. 6). 

In 2013, private residential spending recorded a 15.0% 

increase comparing January to December (SAAR) and a 

19.8% year-over-year increase (AR). By segment, new 

single-family expenditures increased 18.5% (SAAR) 

comparing January to December and recorded a year-overyear 29.3% increase (AR). Multifamily housing outlays 

increased 25.7% (SAAR) comparing January to December 

and increased 43.6% (AR) year-over-year. Improvement expenditures, comparing January and to December, increased 

8.6% (SAAR) and registered a 5.6% year-over-year increase 

(AR) (Tables 9 and 10; Fig. 6). 

Contrasting long-term residential construction spending 

averages, in 2013 total private residential construction 

spending was 10.4% less than the 1993 to 2008 average 

and 3.6% less than the 1993 to 2013 average. New singlefamily expenditures were 32.9% less than the 1993 to 2008 

average and 22.6% less than the 1993 to 2013 average. MF 

spending was 6.9% greater than the 1993 to 2008 average 

and 11.1% greater than the 1993 to 2013 average. Improvement expenditures were 1.5% greater than the 1993 to 2008 

average and 1.3% greater than the 1993 to 2013 average (all 

AR) (Table 11).

Figure 5. U.S. shipments of manufactured homes (left-hand axis), in thousands, and total 

U.S. housing starts (right-hand axis), in thousands. Data source: Census Bureau (2014f).

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

40

140

240

340

440

540

640

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

2013

Shipments Starts
United States Housing, 2013

11

Table 9. Construction spending for total private 

residential, single-family (SF), multifamily (MF), and 

improvements by year and by month (2013)a,b

Private 

residential 

spendingc SFspending

MF

spending

Improvement

spending

2000 346,138 236,788 28,259 81,091

2001 364,414 249,086 30,305 85,023

2002 396,696 265,889 32,952 97,855

2003 446,035 310,575 35,116 100,344

2004 532,900 377,557 39,944 115,399

2005 611,899 433,510 47,297 131,092

2006 613,731 415,997 52,803 144,931

2007 493,246 305,184 48,959 139,103

2008 350,257 185,776 44,338 120,144

2009 245,912 105,336 28,538 112,038

2010 238,801 112,569 14,668 111,564

2011 238,106 106,946 14,669 116,941

2012 280,260 132,010 22,200 126,010

2013 336,209 170,768 32,330 133,111

2013d

Jan 316,541 154,025 29,208 133,308

Feb 320,834 161,914 28,898 130,022

Mar 322,645 165,775 29,325 127,545

Apr 324,399 167,414 30,672 126,313

May 330,046 169,196 30,957 129,893

Jun 331,308 169,788 31,384 130,136

Jul 331,472 171,015 30,708 129,749

Aug 339,203 174,334 32,539 132,330

Sep 346,549 175,405 34,445 136,699

Oct 347,274 174,841 35,640 136,793

Nov 354,502 177,839 37,349 139,314

Dec 364,000 182,469 36,729 144,802

a

In thousands of dollars, annual and monthly data.

b

Data are for conventional housing and do not include mobile home 

shipments.

c

Private residential spending = single-family + multifamily + 

improvement.

d

Seasonally adjusted annual rate.

Data source: Census Bureau (2014c).

Table 10. Construction expenditure yearly comparisons, 

2012 and 2013a,b,c

2013

Change

year-over-year

(%) 2012

Private residentiald 336,209 19.8 280,574

Single-family 170,768 29.3 132,015

Multifamily 32,330 43.6 22,510

Improvement 133,111 5.6 126,050

a

In thousands of dollars, annual and monthly data.

b

Data are for conventional housing and do not include mobile home 

shipments.

c

Annual rate.

d

Private residential spending = single-family + multifamily + improvement.

Data source: Census Bureau (2014c).
Research Note FPL–RN–0340

12

Figure 6. Construction spending, in thousands of dollars, for total private residential, single-family, 

multifamily, and improvement spending, 2000–2013, in millions. SF, MF, and IS, left-hand axis; 

private residential spending, right-hand axis. Data sources: Census Bureau (2014c,d).

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Private residential spending

225,000

275,000

325,000

375,000

425,000

475,000

525,000

575,000

625,000

10,000

60,000

110,000

160,000

210,000

260,000

310,000

360,000

410,000

460,000

SF spending MF spending Improvement spending
United States Housing, 2013

13

Table 11. Historic annual construction averagesa,b,c

Average by time period

1959–2008 1969–2008 1968–2008

Total permits 1,430.0

Total starts 1,534.1

Total under construction 975.7

Total completions 1,531.9

1959–2013 1969–2013 1968–2013

Total permits 1,366.1

Total starts 1,457.4

Total under construction 923.9

Total completions 1,440.3

1959–2008 1969–2008 1968–2008

SF permits 939.4

SF starts 1,092.2

SF under construction 569.1

SF completions 1,101.8

1959–2013 1969–2013 1968–2013

SF permits 898.5

SF starts 1,038.4

SF under construction 535.7

SF completions 1,001.8

1959–2008 1969–2008 1968–2008

MF permits 490.7

MF starts 441.9

MF under construction 406.6

MF completions 430.1

1959–2013 1969–2013 1968–2013

MF permits 467.6

MF starts 419.1

MF under construction 388.2

MF completions 430.1

1963–2007 1963–2013 1999–2007 1999–2013

New house sales 697.1 659.9

Existing house salesd 5,873.6 5,300.8

1993–2007 Adjustedf 1993–2013 Adjustedf

Private residential spendinge 375.1 466.1 348.7 413.0

SF spending 254.7 316.3 220.7 264.4

Improvement spending 90.3 112.7 98.9 114.7

1993–2008 Adjusted 1993–2013 Adjusted

MF spending 31.1 37.5 29.1 33.9

a

In thousands and in thousands of dollars, annual data.

b

Data are for conventional housing and do not include mobile home shipments.

c

Annual rate.

d

National Association of Realtors (2013a).

e

Private residential spending = single-family + multifamily + improvement.

f

Adjusted for inflation.

Data sources: Census Bureau (2014a), National Association of Realtors (2013a).
Research Note FPL–RN–0340

14

In 2013, housing construction’s aggregate share of U.S. 

GDP remained less than the historical average. In 2013, 

housing was increased nearly 1.3% year-over-year from 

2012. It was estimated that housing comprised 15.6% of the 

U.S. GDP (residential fixed investment totaled 3.1% and 

housing services was 12.5%) in 2013 (Fig. 7) (National 

Association of Homebuilders 2014).

Components of and Factors 

Influencing U.S. Housing in 2013

As with most markets, including housing, several factors influence the market. Following is a brief synopsis of several 

of these variables. However, not included are discussions 

regarding the overall U.S. economy, U.S. employment and 

the types of jobs produced, availability of building lots, 

construction employment in housing, deficient credit houses 

and their sale (that is, delinquencies, foreclosures, real estate 

owned, auctions or short-sales, underwater houses, or shadow inventory), and changing home ownership preferences.

Affordability

Affordability metrics utilize several economic and financial 

inputs to provide an estimate of a consumers capacity “... 

to purchase a median-priced home.” For instance, one of 

the more ubiquitous affordability indexes is provided by the 

NAR. Their inputs include median family income, median 

housing prices, a down payment of 20%, qualifying ratio 

(that is, the monthly principal and interest payment cannot 

Housing as a Component of GDP

As an important component of the U.S. gross domestic 

product (GDP) and overall economy, housing is typically 

valued by two discrete means. The National Association 

of Homebuilders (2014) defines housing’s contribution to 

the GDP as follows: “1) private residential investment and 

2) consumption spending of housing services. Residential 

investment includes construction of new single-family and 

multifamily structures, residential remodeling, manufactured home production, and brokers’ fees. Consumption 

spending on housing services includes gross rents (which 

include utilities) paid by renters and owners’ imputed rent. 

Historically, residential investment has averaged roughly 

5% of GDP, while housing services have averaged between 

12% and 13%, for a combined 17% to 19% of GDP. These 

shares tend to vary during business cycles...” (Fig. 7).

Although these are direct measures of housing’s economic 

impact, these estimates unintentionally mask the influence 

of housing construction on allied economic networks. First, 

in the early stages of a business cycle recovery, residential 

construction stimulates about one-fifth of all economic 

growth. Second, construction is credited with influencing 

local government revenue, engenders substantial employment (in recent decades, in the millions), increases building 

materials and home furnishings purchases, and enhances the 

consumer wealth effect (Lascelles 2012). Banking, mortgage finance, and the financial sector also are components 

of the housing economy.

Figure 7. Contribution of housing to GDP, in percentage of total GDP, 1975–2013. Data sources: 

Bureau of Economic Analysis (2014), National Association of Homebuilders (2014).

2

4

6

8

10

12

14

16

18

20

1975 1980 1985 1990 1995 2000 2005 2011 2012 2013

Residential fixed investment + housing services

Residential fixed investment Housing services

15.6

12.5

3.1
United States Housing, 2013

15

exceed 25% of the median family monthly income), and the 

current mortgage interest rate (that is, the effective interest rate charged on closed existing homes provided by the 

Federal Housing Finance Board) (NAR 2014b).

In 2013, housing affordability peaked early in the year and 

then began to decline (Fig. 8). Increasing housing prices 

also affected the first-time home buyer because the percentage purchase share is negatively correlated with the change 

in house price growth (Patrabansh et al. 2014). Declining 

affordability was primarily due to an increase in mortgage 

rates during the spring buying season. Other factors included decreasing real median incomes and increasing housing 

prices.

Demographics

Demographics, as a field of study, typically quantifies a 

population and its segments. Household formations are a 

subset of demographic research, and formations are considered to be one of the cornerstones of the U.S. housing market. Typically, when new households form, these households 

first rent and then eventually purchase a house. Generally, 

household formations occur when adult children leave their 

parents’ homes or a single person exits shared housing. According to the U.S. Department of Census, a “household” 

is an occupied housing unit; a “householder” is a person in 

whose name the housing unit is rented or owned (this person 

must be at least 15 years of age); and a “family household” 

has at least one person living in the house who is related 

to the householder by birth, marriage, or adoption (Census 

Bureau 2014h). 

In the aftermath of the housing crash and the “Great 

Recession,” the rate of household formations has declined 

dramatically (Figs. 9 to 11). Dunne (2012) reported that 

between 1997 and 2002, approximately 1.5 million households were formed per year. With the onset of the Great 

Recession, about 500,000 households were created annually 

between 2008 and 2010, and 1.1 million were formed in 

2011. The 18 to 34 age group is critical for a healthy housing market, and nearly 75% of the total deficit in overall 

household formations were in this age cohort. On average, 

this cohort would normally have formed more than 1 million new households yearly. The total shortfall was nearly 

7.4 million (using the Current Population Survey) in the 

2008 to 2011 time period. For further reference, the Joint 

Center for Housing Studies (2014) reported that “Weak 

labor markets, declining incomes, and high rents continue to 

dampen household growth. The pace of household formations has languished in the 600,000–800,000 range for 

several years, far below the annual averages posted in recent 

decades.” As reported by the U.S. Census Bureau (2014i), 

there were 122,459 million households in 2012 and 122,952 

million in 2013, an increase of 493,000, much less than the 

historical average. 

Figure 8. Housing affordability index (left-hand axis) and home ownership rate 

(percentage) (right-hand axis). Data sources: Census Bureau (2014g), NAR (2014b).

Affordability index Home ownership rate

61

62

63

64

65

66

67

68

69

70

80

90

100

110

120

130

140

150

160

170

180

190

200

198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010

2011

20122013
Research Note FPL–RN–0340

16

As a result of the financial crisis, a large percentage of 

children are living at home, doubling up with similar aged 

cohorts, or renting apartments (another explanation for 

apartment renting is shifting preferences). For example, of 

the households formed in 2013, 63.9%, or 315,000, were 

rental households. Fry and Passel (2014) amplify these data 

and report that “A record 57 million Americans, or 18.1% 

of the population of the U.S., lived in multi-generational 

family households in 2012, double the number who lived in 

such households in 1980. Young adults ages 25 to 34 have 

been a major component of the growth in the population 

living with multiple generations since 1980—and especially 

since 2010. By 2012, roughly one-in-four of these young 

adults (23.6%) lived in multi-generational households, up 

from 18.7% in 2007 and 11% in 1980.”

As a result of changing economics and demographics, 

transformations are occurring in the structure of the housing market. According to Vitner et al. (2013), these changes 

have increased demand for rental units: “Some of the 

strongest population gains are occurring among the youngest cohorts, where home owner rates have fallen sharply in 

recent years. This is one of the key reasons rental demand is 

rising solidly.” 

In addition, the “baby boomer” demographic is projected 

“... to account for 20% of the population”; “... is driving 

demand for homes in active adult communities and retiree 

markets”; and also may “... downsize to a smaller home” 

(Vitner et al. 2013). Also, according to Vitner et al. (2013), 

“...the sheer size of this demographic suggests that there 

could be excess for-sale inventory, as there is a large gap between the boomer and the next large demographic cohort”.

Financing 

In past decades, housing purchases were largely insensitive 

to increasing interest rates, with the exception being extreme 

rises in interest rates. In 2013, the housing market was 

negatively affected by interest rate sensitivity and stringent 

housing finance regulations.

In 2013, the average rate on a 30-year fixed-rate mortgage 

increased nearly 23% from quarter 1 to quarter 4. The average mortgage rate was 3.5% in quarter 1, 3.7% in quarter 2, 

4.4% in quarter 3, and 4.3% in quarter 4 (Mortgage Bankers 

Association 2014a). As a result of increasing interest rates, 

in combination with other factors, mortgage originations 

were disappointing in 2013. For instance, in quarter 1, total 

mortgage originations for 1–4 family units was nearly US$ 

524 billion; by the end of quarter 4, total mortgage originations for 1–4 family units was nearly US$ 293 billion—a 

substantial 78.8% decrease (Mortgage Bankers Association 2014b). In 2013, according to the Federal Financial 

Institutions Examination Council (2014), the number of 

mortgage originations declined to 8.7 million, a decrease 

of nearly 11% from 9.8 million in 2012. However, in the 

segment where large quantities of forest-based products 

Figure 9. Household formations, 1964–2013, in thousands. Data source: Census Bureau (2014e).

55,000

60,000

65,000

70,000

75,000

80,000

85,000

90,000

95,000

100,000

105,000

110,000

115,000

1964196519661967196819691970197119721973197419751976197719781979198019811982198319841985198619871988198919901991199219931993199419951996199719981999200020012002200220032004200520062007200820092010

2011

20122013
United States Housing, 2013

17

Figure 10. Household formations, January 2008 to December 2013, in thousands. 

Data source: Census Bureau (2014e).

Figure 11. Household formations (right-hand axis) and total housing sales (left-hand axis), 

January 1999 to December 2013, in thousands. Data source: Census Bureau (2014e).

Sales Households

100,000 

105,000 

110,000 

115,000 

120,000 

125,000 

4,500 

5,000 

5,500 

6,000 

6,500 

7,000 

7,500 

8,000 

8,500 

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

110,500

111,000

111,500

112,000

112,500

113,000

113,500

114,000

114,500

115,000

115,500

Jan

May

Sep

Jan

May

Sep

Jan

May

Sep

Jan

May

Sep

Jan

May

Sep

Jan

May

Sep

Dec
Research Note FPL–RN–0340

18

are potentially consumed, loan originations for SF housing 

increased year-over-year by 12.3%, rising from 2,663,162 

(2012) to 3,037,748 (2013) (Conventional, FHA, VA, FSA/

RHS loans; first plus second liens).

Tight lending conditions were a result of stringent lending 

standards enacted in the aftermath of the housing crash. 

In addition, the average FICO score required for purchase 

mortgages rose substantially as compared to the housing 

bubble period (Simmons 2014). In mid-2013, housing sales 

were rattled. This was attributed to the announcement by 

the Consumer Finance Protection Bureau’s enactment of 

the qualified mortgage rule. In short, qualified loans are required to have a maximum back-end debt-to-income ratio of 

43% and the mortgagee is vetted for their “ability to repay” 

the loan. Both these provisions arose from the Dodd–Frank 

Wall Street Reform and Consumer Protection Act, and came 

into effect on January 10, 2014 (Forlines 2013).

First-Time Home Buyers

In 2013 media attention focused, in part, on the dearth of 

first-time home buyers, with numerous articles lamenting 

the apparent reduction of home purchases by first-time buyers. This buyer segment is considered a key to the overall 

housing market as they typically purchase existing homes 

and their additional expenditures are typically concentrated on renovations, furniture, and other household goods 

(Dougherty and Wotapka 2013). Through October 2013, 

first-time buyers purchased an average of 38% of existing 

homes (NAR 2014c). Dougherty and Wotapka (2013) wrote 

that on average, in the past 30 years, 40% of existing house 

sales were by first-time home buyers.

However, two recent studies contradict present-day reporting regarding first-time house buyers. In the first study, economic analysts Dill and Terry (2013) report that they did not 

“...find there to be much in the way of a material decline 

in the share of first-time home buyers over the time periods 

and data series...” they researched. In the second study, Patrabansh et al. (2014) estimated that first-time home buyers 

purchased 56% of all homes in 2013; they also reported that 

the first-time share was 37% in 2003, 47% in 2007, 54% 

in 2009, and 63% in 2009. The dichotomy in the estimates 

is in part due to different calculation methods and sample 

populations. The NAR data is derived from existing sales 

data only, whereas the data used by Dill and Terry (2013) 

involved “...the mortgage data set comprised of loans that 

are guaranteed by either Fannie Mae or Freddie Mac and 

loans that are endorsed by the Federal Housing Administration” (Patrabansh et al. 2014).

Housing Age

The age of U.S. houses continues to increase. Slightly 

more than 70% of all U.S. houses were built from 1989 and 

earlier and more than 84% were built from 1999 and earlier 

(Table 12) (Census Bureau 2014i). Aging houses, at some 

point, may require repair and/or remodeling. Howard and 

McKeever (2014) estimated that repair and/or remodeling 

consumed 25% of all sawnwood, 26% of structural panels, 

and 16% of nonstructural panels in 2013 (Fig. 12).

Figure 12. Repair and remodeling as percentage of 

wood products consumption. Data source: Howard 

and McKeever (2014).

Table 12. Housing categories by units of 

stock and percentage

Time period built Units Percentage

1939 or earlier 17,655,373 13.3

1940 to 1949 7,100,778 5.4

1950 to 1959 14,368,833 10.9

1960 to 1969 14,558,476 11.0

1970 to 1979 20,921,539 15.8

1980 to 1989 18,270,659 13.8

1990 to 1999 18,392,931 13.9

2000 to 2009 19,885,902 15.0

2010 or later 1,238,863 0.9

Total 132,393,354

Data source: Census Bureau (2014l).

25%

26%

16%

All sawnwood Structural

panels

Nonstructural

panels

26%

18%
United States Housing, 2013

19

Housing Construction—Framing

Wood framing was used in 94.2% of completed new singlefamily homes in 2013. This is less than the 95.2% used in 

2010 and 95.0% in 2009 (Fig. 13) (Census Bureau 2014l). 

According to Howard and McKeever (2014), new singlefamily attached and detached construction houses consumed 

21% of all sawnwood, 30% of structural panels, and 13% 

of nonstructural panels in 2013; new multifamily apartment 

construction consumed 4% of all sawnwood, 4% of structural panels, and 4% of nonstructural panels in 2013; and 

manufactured housing consumed 1% of all sawnwood, 2% 

of structural panels, and 1% of nonstructural panels in 2013 

(Fig. 14).

Housing Inventories

Housing inventories, new and existing homes, were considered as a detriment for an improvement in the housing 

market. This was due in large part to reduced housing inventory, which also was reasoned to be a factor for increasing home prices. From 1999 to 2008, an average of 2.669 

million existing and 398,361 new houses were available 

for sale. In 2013, 2.058 million existing and 168,583 new 

houses were available for sale. Contrasting 2013 to the 1999 

to 2008 time frame showed a 22.9% decrease in existing 

houses for sale and 57.7% decrease in new houses available 

for sale. Comparing 2013 to 2012, inventories did increase, 

as the differential in the numbers of existing houses for sale 

deceased to a level 9.5% below historical averages and new 

home inventory improved by 15.6% (Federal Reserve Bank 

of St. Louis 2014a,b).

Figure 13. Completed single-family houses, type of framing, 2009–2013, 

in thousands. Data source: Census Bureau (2014j).

Figure 14. New single-family, multifamily, and manufactured housing construction as percentage of wood 

products consumption. Data source: Howard and 

McKeever (2014).

25%

26%

16%

All sawnwood Structural

panels

Nonstructural

panels

All sawnwood Structural

panels

Nonstructural

panels

26%

36%

18%

2009 2010 2011 2012 2013

Total Wood Concrete Steel

0

50

100

150

200

250

300

350

400

450

500

550

600

0

50

100

150

200

250

300

350

400

450

500

550

600
Research Note FPL–RN–0340

20

Figure 15. Housing size, 2000–2013, median square feet. Data source: Census Bureau (2014l).

Home Ownership

The year 2013 witnessed a relatively stable home ownership 

rate: the first quarter the rate was 65.2%; second quarter rate 

was 65.1%; third quarter rate increased slightly to 65.1%; 

and fourth quarter rate decrease somewhat to 65.1% (all 

SAAR basis). 

Although home ownership rate was stable in 2013, there 

is concern over the rate decline from the fourth quarter 

2005 level, when it was 69.2% (Census Bureau 2014j). 

According to Thompson (2014), one factor for the decreasing home ownership rate is that Americans aged 35 to 44 

experienced the largest decrease in home ownership in the 

past 20 years, 9.0%. However, viewing the rate from the 

peak of home ownership (fourth quarter 2005) we see that 

four of five age classifications decreased, only the 65 plus 

age group realized an increase (0.1%). The remaining age 

classifications declined, the under 35 age group (–14.6%); 

35 to 44 (–12.6%); 45 to 54 (–6.9%); and 55 to 64 (–5.1%). 

The overall home ownership rate declined by 5.5% from the 

fourth quarters of 2005 and 2013 (Census 2014j).

Housing Purchasers

Beginning in 2009, the typical purchaser of a house changed 

from first-time buyers and/or move-up purchasers to 

investors, also known as “institutional investors.” These 

investors primarily bought single-family houses to convert 

them into rental units. According to Daren Blomquist, “In 

2011 institutional investors purchased...219,000 residential 

properties nationwide, representing 5.12% of all residential 

sales; 259,000, representing 5.82% of all residential sales in 

2012; and 354,000, representing 7.40% of all sales in 2013” 

(Scotti 2014).

In 2013, numerous investor house purchases were “all cash” 

sales, where investors paid cash for houses. Preceding the 

housing crash and the Great Recession, cash sales averaged 

nearly 25% of all house sales, with the peak occurring in 

January 2011, when cash transactions comprised 46.2% of 

all house sales. In 2012 and 2013, cash sales rose precipitously to 40% of all house purchases (Boesel 2014). All cash 

sales coupled with less than average inventories in the lower 

priced housing category were limiting factors in the reduction of first-time home buyer purchases. 

Housing Size 

Several housing analysts in the 2009 to 2010 time period 

speculated that new construction house size might begin a 

downward trend due to economic conditions. This did occur 

for a short time period. Since then, the median new house 

size has increased from its 2009 nadir, escalating from 2,135 

square feet to 2,384 square feet in 2013, an 11.67% increase 

(Fig. 15) (Census Bureau 2014m). Most likely, given that 

higher priced homes have sold on a volume and percentage 

basis better than lower priced homes, the increasing size 

is reflective of the purchaser class—persons who have the 

financial means and/or financing to purchase a larger home.

Student Debt

In the past few years, student debt has been noted by many 

analysts as a possible hindrance to home ownership. According the Federal Reserve Bank of St. Louis (2014c), at 

the end of 2013, student debt was $US 1.223 trillion. This 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

United States Northeast Midwest South West

1,800 

1,900 

2,000 

2,100 

2,200 

2,300 

2,400 

2,500 

1,800 

1,900 

2,000 

2,100 

2,200 

2,300 

2,400 

2,500 
United States Housing, 2013

21

was a 140.1% increase from March 1, 2006. According to 

Brown et al. (2014), the average student debt loan balance 

increased from $US 29,872 in 2012 to $US 30,227 by the 

end of 2013. 

The primary problems with student debt are not so much 

related to the average balance. Rather, it is the average loan 

balance combined with unremarkable employment opportunities, decreasing inventories or low-levels of entry-level 

homes, and increasing house prices. In many cases it has 

been reported that this combination reduces the capability 

of a potential home buyer to qualify for a home loan. In addition, if the buyer qualifies, then the purchase amount may 

be much less than in the past. For instance, Palacios et al. 

(2014) recently reported that 16.8 million households have 

student debt and that, “...5.9 million (or 35%) pay more 

than $250 per month in student loans, which inhibits at least 

$44,000 per year in mortgage capability for each of them...

people...spend less on their homes.” They further report that 

in 2102, “30-year-olds with no history of student debt are 

now more likely to own a home than those with a history of 

student debt.”

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22

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United States Housing, 2013

23

Glossary

Housing completions—A house is defined as completed 

when all finished flooring has been installed (or carpeting if used in place of finished flooring). If the building is 

occupied before all construction is finished, it is classified 

as completed at the time of occupancy. In privately owned 

buildings with two or more housing units, all the units in the 

buildings are counted as completed when 50% or more of 

the units are occupied or available for occupancy. Housing 

completions are estimated for all areas of the United States, 

regardless of whether permits are required.

Housing permits—The approval given by a local jurisdiction to proceed on a construction project. Note that not all 

areas of the country require a permit for construction.

Housing starts—Start of construction occurs when excavation begins for the footings or foundation of a building. All 

housing units in a multifamily building are defined as being 

started when this excavation begins. Beginning with data for 

September 1992, estimates of housing starts include units in 

structures being totally rebuilt on an existing foundation.

Housing under construction—Estimates of housing units 

started, but not yet completed, are estimated for all areas 

of the United States, regardless of whether permits are 

required.

Seasonally adjusted annual rate—Seasonal adjustment 

is the process of estimating and removing seasonal effects 

from a time series to better reveal certain nonseasonal 

features such as underlying trends and business cycles. Seasonal adjustment procedures estimate effects that occur in 

the same calendar month with similar magnitude and direction from year to year. In series whose seasonal effects come 

primarily from weather, the seasonal factors are estimates of 

average weather effects for each month.

Single-family housing—Dwellings that include fully 

detached, semi-detached (semi-attached, side-by-side), 

row houses, and townhouses.