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What is holding back housing?


There are two major factors constraining the homeownership rate today: limited supply relative to net household formation and restricted credit availability. In this paper, we carefully document each of these factors, arguing that is is very difficult to fix the supply issues, as so much of the problem is local zoning laws, while steps can be taken to fix the credit availability issues. The supply/demand imbalance is currently the more significant of the two problems, as it places upward pressure on both home prices and rents.

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Fig. 1

Sources U.S. Census Bureau, Urban Institute estimates

Fig. 2

Source Davis and Heathcote (2007)

Fig. 3

Source U.S. Bureau of Labor Statistics retrieved from FRED

Fig. 4

Sources eMBS, Corelogic, HMDA, IMF, and Urban Institute. Note Default is defined as 90 days or more delinquent at any point. Last updated January 2017

Fig. 5

Sources Fannie Mae single family loan-level dataset and Urban Institute calculations

Fig. 6

Source Mortgage Bankers Association Servicing Operations and Forum, Prime Servicers, and Urban Institute


  1. As reported by Eggers and Moumen (2016).

  2. Methodology developed by Davis and Heathcote (2007); data located on the Lincoln Institute of Land Policy website. The overall home price indices used for this calculation are from MacroMarkets LLC (formerly Case-Shiller-Wiess).

  3. See Urban Institute; based on methodology by Li and Goodman (2015).


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Correspondence to Laurie S. Goodman.

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Goodman, L.S. What is holding back housing?. Bus Econ 53, 79–85 (2018).

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  • Housing
  • Housing supply
  • Mortgage credit
  • Zoning