Housing in a Growing Economy Presented by Prof. Laura Kalambokidis To the Governor’s Task Force on Housing January 12, 2018

Slow-growth U.S. expansion expected to persist Average for 20-years prior to Great Recession = 3.1% Source: U.S. Bureau of Economic Analysis (BEA), IHS Markit (IHS)

State unemployment rate remains below the U.S. = U.S. Recession 8+ Years

Low unemployment and high demand for workers tighten the labor market +1.5% +1.5%

Housing challenges co-exist with a strong economy Home prices upaffordability down But: Home prices uphousehold wealth upconsumer spending upeconomy grows Rents upaffordability down But: Rents upbusiness profits upeconomy grows Wages upconstruction costs up But: Wages upconsumer spending upeconomy grows