Knut Aastveit, Bruno Albuquerque, André Kallåk Anundsen, 25 February 2020

Housing supply elasticities can help explain why house prices differ across locations. This column uses a rich dataset and a novel identification method to show that US housing supply has become less elastic since the Global Crisis, with bigger declines in places where land-use regulation has tightened most and in areas that had larger price declines during the crisis. This new lower elasticity means US house prices should be more sensitive to changes in demand than before the crisis.

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