The U.S. needs the basic housing product it last built n the 1940's

Implications: The featured commentary notes that even as home prices across the nation implode, affordability ratios are not moving in favor of the consumer.  Wages are lagging the increase in household budget items such as utility costs, food, transportation, gasoline and heating oil, communications services and electronics costs, education and healthcare.

Analysis: Furthermore, the quality side of household income is for more and more families not sustainable enough to consistently make the payments required for home ownership even if there is a point or period in time that they can qualify for a home loan. Since the overall wealth of the industrialized countries in the West including the U.S. is declining, this will continue to take another slice out of the volume of home resale transactions and new home starts in the aggregate even beyond the sharp cuts we see now and project for the near future.   A consistent approach to the start of new homes has been to plan and build a smaller home on a smaller lot.  This approach has not yet dented the downturn, but it is causing fiscal difficulty for the public entities charged with local and regional health, safety and welfare.  It’s a lot different problem sourcing income to service populations in less expensive housing since ad valorem taxes are also less affordable and collectible from a population with lower means to pay.   What we’re looking for here is increased productivity and wage levels in the housing market we’re researching.  I think the U.S. worker is more productive than ever, but we are not at a level where real earnings will sustain production of the luxury move-up product we are producing.  If we can’t find a way to earn enough on the median to afford full-amenity production homebuilding, we may have to go to the un-amenitized level of product say Mexico produces without full kitchens and baths, floor coverings, garages … in order to provide basic shelter.  In the U.S., you can look at the Salt Lake City tracts which are completed at a level which will house large young families for a lesser price point f you want an American comparison.   Worse things could happen. All we’re talking about in housing is the same as we’re talking about in automobiles.  We just can’t afford Mc Mansions any more than we can afford to drive 6,000 pound SUV’s on the average if we want a fully balanced modern life in a safe city.