U.S. Housing Market in 1967

In 1967, the U.S. housing market recorded new-construction sales of 487K.

Source data from U.S. Census, NAR, and Freddie Mac PMMS where available.

By the numbers — 1967: new-home sales 487K.

Macroeconomic Context

After the credit crunch of 1966, the economy and housing market recovered more quickly than many had expected. Real GDP growth moderated to roughly 2.5% as the Fed eased monetary policy and the liquidity crisis at savings institutions abated. Inflation ticked up to 3.1%, reflecting persistent Vietnam War spending pressure, but the Fed's brief easing kept mortgage rates from rising further — 30-year rates settled back toward the 6.2–6.5% range after the 1966 spike.

The Johnson administration, facing mounting criticism over both the war and urban unrest following the long hot summer of riots, pushed through the Air Quality Act and continued expanding social programs. The National Housing Act was amended to bolster FHA insurance programs, and planning accelerated for what would become the comprehensive Housing Act of 1968. Congressional debates over a surtax to fund the war foreshadowed the Revenue and Expenditure Control Act of 1968, which would temporarily slow growth but help contain inflation.

For housing, 1967 was a year of repair and rebuilding after the 1966 shock. The thrift institutions that had been starved of deposits gradually recovered their funding bases as the Fed loosened policy. Builder starts rebounded, inventories of unsold new homes were worked down, and buyer demand — pent up from 1966's credit squeeze — reasserted itself. The recovery demonstrated that the underlying demographic and income trends driving 1960s housing demand had not changed; only the credit machinery had momentarily seized.

Macroeconomic Context

See also