> Material costs are up. Land prices are up. Labour cost is up. Building code standards are way up. Building permit prices are up. Houses are 2x-3x bigger than

> Material costs are up. Land prices are up. Labour cost is up. Building code standards are way up. Building permit prices are up. Houses are 2x-3x bigger than they used to be. The core truth about house prices is that they mean revert to replacement cost (see previous link to interview with Chris Bedingfield). Obviously no-one will build stuff that people can't afford to buy at a profit, so you won't see a supply response from people who build houses, until the price for which they can sell the house exceeds the cost to build. So long as people are competing for existing stock, they will bid up the prices, and this causes a supply response once those prices push the price beyond where it is profitable to build. > Lack of supply? 15 million houses sit empty. https://fred.stlouisfed.org/series/EVACANTUSQ176N https://fred.stlouisfed.org/series/EVACANTUSQ176N Vacant housing contributes to the supply problem!