Two Graphs That Illustrate America’s Dysfunctional Housing Market
Jed Kolko, chief economist at real estate information giant Trulia, recently shared these two graphs that give us an interesting glimpse into what’s happening in the American housing market.
This first graph shows that housing development is growing fastest in the suburbs. To be precise, the most sprawling, suburban of suburbs.
But that’s only part of the story. If you look at where housing prices are rising fastest, the pattern flips. The most urban neighborhoods are where prices are heating up the most.
What does this tell us? A few things.
As Kolko put it in a follow-up tweet, “limited supply” is “constraining urban growth.” It’s much, much easier to build new homes in undeveloped greenfields than in central cities, where zoning and NIMBYism prevent housing construction. If we’re going to reduce sprawl and make city living affordable, we’re going to need to ratchet up housing construction in urban areas.