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Watching the Economy by Clint Burdett CMC® FIMC

February 24, 2012

Buffett admits he was too optimistic on housing bounce back

Last year, I [Buffett] told you that “a housing recovery will probably begin within a year or so.” I was dead wrong. See the 2012 Bershire Hathaway letter to Shareholders at page 4

Housing is bottoming out but at about 550,000 new starts for single family homes, well below 1,000,000 new starts needed to cut unemployment dramatically.

This US Census chart helps explain the trend.

Demographic pressures (couples form new households) will eventually spur demand, but it will take some more time.

Single Family Housing Starts

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