The US Needs More Housing. Americans Don’t Want to Build It.
More new supply would help stem the rise in home prices and rents, but builders can’t find enough workers for the record amount of residential construction that has been announced.
Will this house ever be completed?
Photographer: Allison Joyce/Bloomberg via Getty Images
You won’t find this term in any serious economics textbook, but the only clinical way to describe the US housing market is bananas. Affordability is at record lows and mortgage rates are the highest since 2000. And yet, home prices continue to rise and the number of days a house sits on the market before it is sold is down by a third compared with this time before the pandemic, both suggesting strong underlying demand.
Everyone knows what the real problem is with housing: a lack of supply. But what’s less well understood is why there’s a persistent lack of supply in both housing for sale and for rent. In a market economy, high prices are supposed to lead to an increase in supply. And at least on the multifamily side, government data show developers have started construction on around one million units, surpassing the previous record set in the early 1970s.