Christopher Matthews
February 19, 2014

Sure, the real estate market recovery began in earnest sometime in 2012, as home prices finally began to rise after a half decade of post-bubble flatlining. But even as prices rose, the construction industry stayed on the sidelines, waiting for the market to work through the mass of foreclosed inventory that was weighing it down.

But eventually, analysts predicted, continued population growth and a recovering job market would mean that the U.S. would once again have to start producing a slew of new homes. As Goldman Sachs analyst Tom Teles wrote in November:

We expect construction to increase due to a significant shortfall in housing supply relative to potential demand. Both household formation and homebuilding have lagged population growth since 2008, resulting in pent-up housing demand and underbuilding of new housing supply.

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