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Housing Affordability and Housing Demand

Author

Listed:
  • Schuyler Louie
  • John Mondragon
  • Rami Najjar
  • Johannes F. Wieland

Abstract

Understanding housing demand dynamics through two indicators, income growth and population growth, provides important insights into housing affordability. Research shows that average U.S. income growth is strongly related to rising house prices but is essentially unrelated to changes in the supply of housing units across metropolitan areas. Instead, greater population growth translates into greater housing supply growth, with housing supply generally outpacing population, even in expensive markets. Thus, differences in affordability across areas may reflect differences in the growth and type of housing demand rather than different housing supply constraints.

Suggested Citation

  • Schuyler Louie & John Mondragon & Rami Najjar & Johannes F. Wieland, 2026. "Housing Affordability and Housing Demand," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2026(03), pages 1-5, February.
    • Handle: RePEc:fip:fedfel:102383
    as

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    References listed on IDEAS

    as
    1. Schuyler Louie & John A. Mondragon & Johannes Wieland, 2025. "Supply Constraints do not Explain House Price and Quantity Growth Across U.S. Cities," NBER Working Papers 33576, National Bureau of Economic Research, Inc.
    2. Edward L. Glaeser & Joseph Gyourko, 2025. "America's Housing Supply Problem: The Closing of the Suburban Frontier?," NBER Working Papers 33876, National Bureau of Economic Research, Inc.
    3. Edward Glaeser & Joseph Gyourko, 2025. "America's Housing Supply Problem: The Closing of the Suburban Frontier?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 56(1 (Spring), pages 375-453.
    Full references (including those not matched with items on IDEAS)

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