It now seems to be a consensus that foreclosures this year will be higher than last year, that is to say, the rate of foreclosures will set a new record. At the same time, new home sales were at the lowest level ever recorded in January. New home sales are normally low in January, but the rate has fallen below the lowest level recorded in the 1970s.
And perhaps that makes sense. The adult population is not growing as fast now as it was then, and Americans are moving away from housing in a big way — witness the apartment vacancy rates, still increasing in spite of lower rents, and in spite of the record rate of foreclosures.
The decline in the consumption of housing does not bode well for the sale of furniture. People who are giving up a three-car garage will find it harder to add an extra car, and if there is a shorter commute, there is less need for it. With fewer closets and shelves, it is hard to buy so much clothing and so many trinkets. With a smaller living room, or one shared among more people, the number of large-screen televisions required goes down. Scaled-down housing also means less money spent on energy for lighting and climate control. Consumption of almost all kinds would seem to diminish as housing diminishes. And this would seem to hold true whether people’s housing reduction is involuntary, in the form of a foreclosure, or voluntary, undertaken as a strategy to live a more comfortable life.
Yet this should eventually work to the advantage of most forms of public accommodation, from libraries to nightclubs. People who live in smaller houses or share a house with more people tend to go out more often — and they have time to do so, because a smaller home takes less effort to take care of.
So, as an initial approximation, I am looking for the trend away from housing to be accompanied by a decline in manufactured products, but an increase in nights out on the town, and perhaps in travel, although not necessarily by airplane.