Chart of the Day: Singlefamily unit growth holding steady, but at fairly low levels

March 2015 data for private housing units show that, overall, housing unit production continues to climb in both singlefamily and multifamily industries. At this time, however, there is no danger of new construction reaching anything like the levels seen during the housing bubble of 2003-2007. The first graph shows the last two economic cycles in terms of new units permitted. We can see that, while numbers are up considerably since the trough in 2009, they remain at levels more comparable to the early 1990s. Of course, if we account for population size, new construction is then lower than the early 1990s in practical terms.

What do we see in terms of percentage growth? Singlefamily permit activity has largely flattened out. In January, the YOY change was negative at -4 percent, and over the past five months, growth has been under ten percent. Of course, this is still growth, so we shouldn't speak of singlefamily construction as if it has disappeared, but in a long term view, growth is fairly flat right now, and certainly, if we consider the high rates of home price growth, we can guess that the market could easily bear more home construction. So why is there so little? Uncertainty in the marketplace and among wage earners could be a factor, as might be the fact that the multifamily market is employing many of the resources that might have gone to singlefamily in a different type of market.

And speaking of multifamily units, have a look back at the first graph and note that the gap between singlefamily and multifamily units has disappeared. If you saw this and though, "gee, it looks like there are far more multifamily units — proportionally — being produced than usual," then you would be right. The last graph shows that over the past 25 years, multifamily construction has rarely been much more than 30 percent of all units. But if we look at the market since 2011, we find that this proportion is commonly over 40 percent, with even a few months reaching over 50 percent. This is a change in the general habit of the local market, and reflect nationwide changes in trends in which home ownership is falling and many households are opting for rentals for a variety of reasons.

Colorado is the size of New Zealand, with a GDP comparable to Thailand

Sometimes, it's easy to forget how large many American states are. Colorado, for example, is the size of New Zealand. Here's a helpful map for all states:

Source. 

But that's just comparing by physical size. If we compare by GDP, Colorado is the size of Thailand, which is not tiny. Of course, this is not per capital GDP. Per capital GDP is much higher in Colorado than in Thailand. Indeed, with five million people, Colorado generates a similar GDP to Thailand's population of 64 million people. The map:

We can also compare based on population size, in which case Colorado is similar to the small African country of Eritrea.

Year-End 2014 Foreclosure Report for Metro Counties in Colorado

Foreclosure stats for Colorado's metro counties up through the end of 2014:

Monthly Foreclosure Report Dec 2014 No Logo

'Commie Cowboys' Now Available Online for Free

Having become so fabulously wealthy on royalties, I've decided to make my book Commie Cowboys available online for free. I posted it here, where you can download it in PDF. If you like it, be sure to review it at the book's Amazon page. If you prefer a physical book, you can certainly still buy it on Amazon for a measly $5.99. There's an even cheaper Kindle version, also.

It's a book that details how the so-called "classic" Westerns of the post-WWII period hardly deserve their reputation for being pro-capitalist symbols of freedom. In fact, the old silent Westerns and the more modern "cynical" Westerns like Unforgiven and The Good, The Bad, and the Ugly are vastly superior, from a laissez faire perspective.

 Lew Rockwell and I talk about the book here.

Some New Library Books

The great Professor John Cochran, retired Dean of the business school at Metropolitan State College of Denver, and author of many fine scholarly articles on monetary policy and banking,  has kindly donated much of his personal library to my personal library. Included are numerous economics and history books. I'm most happy about the Henry Hazlitt books. These are just some of them:

Citi Economist: Time to Abolish Cash

Also published at Mises Wire.

We often focus on the fact that abolishing cash abolishes the last remnants of financial privacy. But of course, abolishing cash also increases the Fed's ability to manipulate the economy.

Bloomberg reports that Citi economist Willem Buiter has called for the end of paper currency based on the benefits such action would bring to central banks. Specifically, the existence of cash limits a central bank's ability to manipulate the ecomomy with negative interest rates:

In a new piece, Citi's Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates. 

Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction?

Cash therefore gives people an easy and effective way of avoiding negative nominal rates. However, if you abolish cash, there is no escape from negative interest rates. All your money must be in an institution that can then punish you for saving any cash. There are half-way measures such as taxing currency, too.  Buiter does not have to go far to find an example of where a central bank may have wanted to set interest rates much lower to -100bp. He uses (a fairly aggressive) Taylor Rule to show that Federal Reserve rates should have been as low as -6 percent during the financial crisis." Sure, some people will protest the abolition of cash, Buiter concedes, but overall the arguments in favor of cash "seem rather weak."

My Mother and Me in 1978

In San Marino, California, which at the time was a middle-class neighborhood: