Yulia Slavina

New housing construction lowers prices while scarcity drives increases, Luis Garicano notes

New housing construction lowers prices while scarcity drives increases, Luis Garicano notes
Housing supply affects price trends in cities

Luis Garicano highlights that new data from a leading U.S. newspaper editorial supports a fundamental economic principle: in areas where housing construction increases, prices tend to fall, while in areas with limited building, prices rise.

He cites San Francisco as an example, noting that only 22 new housing units were built per 1,000 households over the last decade, correlating with higher property prices.

Garicano has previously commented on how markets assess risk in U.S. Treasuries, noting yields rise in response to fiscal news and policy changes by the Federal Reserve in recent analysis. In another report, he discussed how a security shock is affecting economic performance in Europe, with Poland's per capita GDP catching up to other nations as a sign of divergence across the region in his commentary. These observations reflect Garicano’s focus on links between policy decisions and economic outcomes.

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