Take heart: Throughout this housing slump, people kept getting married, having babies, forming households and, ultimately, needing a place to live. In fact, the National Association of Home Builders (NAHB) estimates we're "underbuilt" by 3.28 million homes.

NAHB's Robert Denk and Paul Emrath reached that conclusion by plotting a trend line that reflects the average annual increase in housing permits between 1988 and 2003, and then comparing that with the actual numbers of permits issued from 1988 to 2009. That chart (below, at right) shows marked overproduction in 2003 through 2005 followed by a decline to the norm in 2006 and huge underproduction since then.

Denk and Emrath say the underbuilding hasn't triggered a rise in demand because the household formation rate, which averaged 1.2 million households annually between 1960 and 2005, has fallen far below that level as a result of the recession and joblessness.

"But it would be difficult to explain why households would choose to remain bundled together after house prices stabilize and labor markets improve," the NAHB researchers say, "and why the 2.17 million unit cumulative net deficit in single-family production (projected to be 3.28 million by the end of 2010) doesn't therefore represent a significant pent-up demand that will at some point need to be worked off and begin to impact single-family housing."