Dodd-Frank and other restrictive lending legislation have hampered the housing recovery. There is plenty of demand for homes but when you villainize those who lend money and make them responsible for every bad loan, you can bet only the best credit is going to get a lone. So, you get what we got below.
Single Fam Housing Starts while double the 2009 lows remain near previous recessionary lows if one reviews the history from Jan 1959. This is due to raising bank reserve requirements to 12%-13% range from the historic 10% and Dodd-Frank stringent home buyer underwriting requirements.
Rents have soared and recent college grads are kept out of home buying. I continue to avoid banks and home builders as likely to miss the traditional business levels most investors continue to expect. Also, home prices have soared due to foreign capital flooding the US as a safe haven with the actions in Russia, Turkey, Venezuela, Iraq/Iran/Syria and the rise of ISIS. Lately No Korea has added fuel to US$ strength as has the political conflict in Spain.
I think housing will not shift to 1.2mill starts this cycle unless something reverses the restrictions on banks and it may already too late for this with current pricing levels. I prefer commodity and export related cos to benefit from a falling US$.