John, great article, but what happens to rental housing costs and what happens to renters if the cost of owning and then renting a house costs more to the landlord, most likely to be past on the tenants. Where are the stats about how much builders are taxed to start a home?? About 35% of people rent. They are benefiting from the "tax breaks" the landlords are getting as well. Other wise landlords would put the investment to work in something else..and rents would skyrocket.

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John, this one so really good!

An area to expand on in future discussions might be how demand for housing was impacted Covid.

Many homeowners increased their demand for space (whether to work from home, or to host at-home schooling). This generated an outlier spike in demand for the amount of housing.

Further, adding to the point you already made, demand for increased space was in different locations from where people had envisioned living in 2019.

Those locations (think suburbs, or Mountain States) had little pending new supply in the pipeline when Covid hit. Remote work further changed the rules on where people might live.

The key questions going forward are: 1) are those lifestyle changes permanent (even if Covid were to disappear), and 2) how long will it take to generate supply for those new locations.

My sense is that the HPA for 2020-21 represents a surge due to an immediate change in preferences, combined with a slow change in supply, but that as supply comes to new areas (at the same time interest rates are increasing) HPA will temper off toward longer-term trends.

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