From Investing.com: 2025-06-05 11:08:00

In 2025, the 2008 mortgage crackdown continues to impact housing and the economy, with little acknowledgment. A new book “Abundance” by Ezra Klein and Derek Thompson faces pushback from the progressive left attributing bad outcomes to corporate market power, without considering the mortgage crackdown’s effects. The collapse in construction post-2006 is linked to the mortgage crisis, with 1/3 of mortgage access wiped out, affecting single-family home and apartment construction for years. Academics Glaeser and Gyourko analyze urban zoning issues post-2006, noting a decline in new housing growth rates and rising prices due to zoning changes. The elephant in the room – the mortgage crackdown – is a crucial factor affecting construction trends and housing prices.

Detroit and Los Angeles show similar trends in limited housing unit production and rising prices post-2008 mortgage crackdown, impacting low-income families. Construction rates decline due to mortgage restrictions, leading to regressive rent inflation in both cities. Glaeser and Gyourko analyze construction trends in 6 metro areas, finding a decline in low-density construction due to post-2010 collapse of single-family home construction. The mortgage crackdown’s impact on housing supply and prices is highlighted, affecting construction rates in different neighborhood types.

Data issues and misconceptions arise in analyzing housing price trends, with the mortgage crackdown’s effects often overlooked. The impact of constraints on housing supply is evident in changing construction rates and prices in suburbs and city centers post-2008. The failure to consider the mortgage crisis as a key factor in housing market dynamics leads to skewed conclusions and missed opportunities for policy interventions. The need to address the mortgage crackdown’s effects on housing supply and affordability is essential for a more accurate understanding of current housing market challenges.



Read more at Investing.com: The Missing Elephant in Housing Economics: What Everyone Overlooked Since 2008