Economics
Costly Housing Will Make the Job of Taming Inflation Even Harder
- Supply is squeezed, demand is strong, financing is solid
- Rent and equivalent owners measure are poised for increases
This article is for subscribers only.
There are plenty of reasons US housing will remain costly, which in turn will contribute to inflation, complicating the Fed’s policy path.
The basic supply-and-demand dynamic -- with the former squeezed and the latter still strong -- means consumers will need to pay up for a place to live. A tight labor market and rising wages also support home prices. Solid financing, stricter regulation, and “massively deleveraged” consumers with equity-rich properties make the case for strategist Jared Dillian, who’s outlined why there won’t be another crisis in residential real estate.