The Best Way to Bring Down Inflation? Give Americans Something to Buy

Residential single family homes construction by KB Home in Valley Center, Calif., June 3, 2021. Picture taken with a drone. (Mike Blake/Reuters)
Zoning rules and mortgage regulations are pushing up the cost of housing.

NRPLUS MEMBER ARTICLE I nflation is no longer on the backburner, as more money, lower interest rates, and government stimulus seem to be boosting consumer demand, especially in housing. Home prices have been rising faster than they had been even during the infamous 2000s bubble. A classic case, it seems, of demand (meaning money) outpacing suppliers’ ability to produce the goods people want to spend that money on, which leads to rising prices. But there is something more to today’s housing market.

To see what’s so odd, look closer at what housing “demand” is. There is the demand for shelter, which expresses itself as rental expenses.

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Kevin Erdmann is a visiting fellow at the Mercatus Center at George Mason University and the author of the upcoming book Building from the Ground Up: Reclaiming the American Housing Boom.


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