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Bookmarked. Housing markets yield themselves well to supply and demand analysis, but one needs to be really disciplined in interpreting how to fit observations to the model. It's easy to fall into the traps. Credit was cheaper and prices went up, so higher prices must have been caused by demand. And in a narrow sense that's true, the supply curve didn't move, but the issue is still on the supply side. If you build a wall in the middle of the road and a bus runs into it, the accident is caused by the bus running into the wall not the wall running into the bus, but the issue is still with the wall in the road, not with the bus.

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Jun 6, 2023Liked by Kevin Erdmann

Thanks for consolidating this in one place. And thanks for helping me understand what went wrong in 2006 to 2009, and what's still going wrong with the housing market. I've substituted using the phrase "housing bubble" with "housing bust."

Although I still tend to view zoning and other land use regulations as the root cause of our supply shortages, you've convinced me that the current lending standards are designed to keep lower income people permanently in the rental market.

What are you doing next? Leading a march on Washington? Or, short of that, setting out more specific policy recommendations.

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