Housing starts as a share of the population decreased by roughly 39 percent in the 15-year period from January 2006 to June 2021. This decrease became particularly pronounced after the peak of the 2000s housing bubble. The figure above shows that housing starts as a share of the population has been on an overall decreasing trend since the 1970s. A simple way to observe this fact is by looking at housing starts ( i.e., new residential construction) as a share of the U.S. ![]() Through both legislative and non-legislative measures, these policies have the potential to create or rehabilitate over 2 million housing units, including at least 1 million rental units, based on HUD estimates from past program performance.įor the past 40 years, housing supply has not kept pace with population growth. In the blog, we describe this perennial problem and outline the Administration’s wide-ranging proposals, including those in the Build Back Better agenda, to address the supply shortage and reduce price pressures in the housing market. The pandemic exposed these constraints that have been around for decades and have impacted households across the income distribution. While the pandemic may have transformed preferences and caused supply chain disruptions, it did not create the underlying supply constraints in the housing market, which have decreased the stock of rental homes and homes for-sale. Home prices outpaced income growth in 2020, with the national price-to-income ratio rising to 4.4-the highest observed level since 2006. Indeed, national home prices, as measured by the Case-Shiller Index, increased by 7 to 19 percent (year-over-year) every month from September 2020 to June 2021. These pandemic-related changes interacted with the existing housing inventory shortage, resulting in sharp price increases for both owned homes and rental units. The COVID-19 pandemic shifted families’ preferences for location and type of housing, exacerbating existing supply chain constraints that-for several reasons-have persisted for many years. Get Involved Show submenu for “Get Involved””īy Jared Bernstein, Jeffery Zhang, Ryan Cummings, and Matthew Maury.The White House Show submenu for “The White House””.Office of the United States Trade Representative. ![]()
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