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Just look at the data: https://tradingeconomics.com/united-states/housing-starts https://tradingeconomics.com/united-states/housing-starts Additional supply di
by danielmarkbruce 4y ago
Just look at the data: https://tradingeconomics.com/united-states/housing-starts https://tradingeconomics.com/united-states/housing-starts
Additional supply did come on, and has dropped recently in response to rates.
It's really not more than high school supply/demand. There are just a good number of factors which make up each at each location, and at least one of them is large and unpredictable (interest rates). There is always a lag on the supply side because only so many houses can be built at any time. It's the same for many commodities like oil and gas.
Actually computing a good supply or demand curve has always been the difficult part, not the theory. But supply lag and interest rates make up a big component of property supply and demand.
- steveshurley44 4y agoI think that's what the person above you meant as well, that prices being high due to a lack of supply is not controversial nor is it very interesting.
- danielmarkbruce 4y agoNone of it is especially interesting or controversial... it's just a lot of details which make up the supply and demand. There is no pithy "this is the deep reason why", which is what it seems they want to hear.