This Chart Should Assuage Fears of a Housing Bubble

American housing is often lumped in with Bitcoin and Tesla Inc. as a bubble market. True, prices have risen sharply. The median sales price of a previously owned single-family house in the U.S. reached $314,300 in December, up 93% in 11 years, according to the National Association of Realtors. But this chart shows that the force behind the price rise is a supply shortage, not a speculative frenzy.

The peak of the homeowner vacancy rate, at just shy of 3%, was 2007-08, when there really was a bubble in the market. Builders were putting up houses faster than the U.S. population could form households to occupy them. It took awhile, but eventually prices plunged, people defaulted on their mortgages, and the U.S. economy crashed, helping bring down the global economy with it.