If you zoom out on that graph, housing starts were well-below average for over a decade and were actually trending down even before 08: https://fred.stlouisfed.

If you zoom out on that graph, housing starts were well-below average for over a decade and were actually trending down even before 08: https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST Decreased supply along with increasing population(demand) generally yields a shortage and increased prices.