Anthony Downs at Brookings, from “What’s Wrong With American Housing“:

Even before the dramatic collapse of housing starts after 2005, it should have been obvious to home building firms that they were in for a downward ride after starts surpassed two million in both 2004 and 2005. Those years of peak production led to an oversupply in 2006 that started driving nationwide median home prices downward for the first time since 1968. That overbuilding then helped generate the chain of events that led to the lending freeze of 2008-2009.