Parting Ways
From 2019 through April 2020 residential and commercial construction followed the same path.
Both were on a decline already in 2020 then Covid accelerated the pace.
In June of 2020, the recoveries in residential and commercial construction parted ways.
It’s easier to spot with year-over-year comparisons.
Construction Spending Year-Over-Year
Note the great parting of ways ahead in 2006 of the Great Recession. It’s a reverse setup now with residential leading.
Fed’s Response in Play
What’s happening now reflects Covid and also the Fed’s response to it.
Interest rates are the lowest in history thanks to the Fed.
Commercial, especially malls, were already in a bad spot given trends in online shopping.
Covid amplified online shopping trends as well as the need for less office space due to increased work-at-home arrangements.
Mish
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Well i would imagine part of the increase in residential would be replacing homes burned in 2019/ 2020 fire season in ca. 10500 ish homes destroyed in 2020
The 60 year cycle for interest rates is 40 years into its present cycle. The general trend for interest rates over the next 20 years will be UP.
Its simple, that can’t make rent with such a low volume of people.