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FIGURE 5: Construction Starts for Single- and Muttifamity Units.- <br />Fannie Mae Projects a Stow Recovery <br />2,500 <br />-F <br />Cc: <br />2,000 <br />1--- <br />1,500 <br />2�1 <br />E <br />1,000 <br />C: cn 500 <br />0 <br />2003 2004 2005 2006 2007 2008 2009* 2010* 2011* <br />Sources: U.S. Census Bureau, Fannie Mae. <br />Note: * = Fannie Mae projections. <br />The current recession, however, has dramatically suppressed natural household growth <br />in the past two years. IHS Global Insight, a leading economic consultancyl, reports: <br />This compares with an increase of 1.63, million from March 2006 to March 2007 and <br />constitutes a 75 percent drop in household formation over two years during which mil- <br />lions of young adults graduated from high school and college. When jobs return, there <br />will be a surge in housing demand caused by those who would have formed a new <br />household but could not do so, along with those just coming into the housing market. <br />Over the past decade, housing production topped 2 million homes a year, far greater <br />than demand. This has led to the collapse in production today: only 6001,000 homes <br />were started in 2009. This number is projected to rise to 8001,000 in 2010„ but it is still <br />below what is needed to meet new household demand when the economy recovers. The <br />percentage of new housing production that is multifamily will increase as production <br />returns because most new households will be members of generation Y and immi- <br />grants, both of which will be renting in large numbers. This will be reflected in a decline <br />in the homeownership rate. <br />IiU <br />