We may be looking at the housing affordability crisis all wrong. Higher earners are driving home prices, not lack of supply, researchers say | Fortune

""However, there is almost no connection between average income growth and growth in housing supply," they added. "Instead, housing supply growth has a strong positive relationship with population growth. In fact, almost all metro areas saw housing units grow faster than their population—even in expensive residential markets like Los Angeles or San Francisco.""

""This research indicates that regulatory reforms may have limited impact on housing affordability and that differences in housing supply constraints are not the fundamental drivers of differences in housing dynamics across metro areas," they said. When looking at average income, the researchers found it grew "essentially one-for-one with house prices" from 1975 to 2024."

Average income growth closely tracks house price growth, indicating a strong relationship between incomes and housing costs. Housing supply growth shows almost no connection to average income growth and instead correlates strongly with population growth. Most metro areas added housing units faster than population growth, including expensive markets such as Los Angeles and San Francisco. House prices and median income tracked together until about 2000, after which house prices grew much faster than incomes. Regulatory reforms targeting supply constraints may therefore have limited impact on overall housing affordability dynamics.

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