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Income Growth, Not Supply, Drives Housing Affordability

2/8/2026

33 5 Full Breakdown

Summary

Story summary

The Federal Reserve Bank of San Francisco, led by Schuyler Louie, finds housing affordability ties more to income growth than supply.
The study shows home prices rise with incomes, challenging the view that housing shortages are the main driver.
It notes that housing supply has often outpaced population growth in markets such as San Francisco.
The findings imply inequality drives prices and policymakers should focus on labor-market changes.

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Story summary

The Federal Reserve Bank of San Francisco, led by Schuyler Louie, finds housing affordability ties more to income growth than supply.
The study shows home prices rise with incomes, challenging the view that housing shortages are the main driver.
It notes that housing supply has often outpaced population growth in markets such as San Francisco.
The findings imply inequality drives prices and policymakers should focus on labor-market changes.