[useryournoggin]

comparing aggregate rates of household formation vs housebuilding doesn't tell you very much as household formation is dependent on housing supply.

in the absence of supply constraints, if the price goes up this creates an incentive to build more houses, which will balance out any increased demand. there is also good research that shows supply constraints do matter in the UK - http://personal.lse.ac.uk/hilber/hilber_wp/Hilber_Vermeulen_...