And they’re never going to correctly identify the problem if they’re analysing it as a national issue, rather than a bunch of local issues in a trenchcoat.

It’s clear that there must be a supply issue, as there is an observed reduced availability in homes, driving up prices. But it’s hard to spot in nationally averaged data, as these are local shortages, not national ones. The capitalisation of the economy demands a centralisation of labour, meaning people move from rural to urban areas. Similarly, there are some urban areas facing population flight due to the closure of key industries, meaning people move out to where their income is. And then there’s the matter of immigrants, who tend to stick around in progressive cities where they are both welcome and can get a job.

This is also why Covid had such a high impact on housing prices: mostly rural businesses went under, whereas urban businesses in high-density areas were more easily able to keep sufficient customers, or could rely on subsidies provided by richer cities. This too shifts the demand for labour from rural areas to denser urban areas.

The availability of credit is an accelerator of rising prices, not a direct cause. In a buyer’s market, supply is plenty so there’s no need to overbid as you can easily buy a similarly priced (or even cheaper) home nearby. But as anyone who’s looking for a home will tell you: that’s not available at the moment. So they have to overbid to get anywhere, and prices rise faster because that credit is available to do so.

In a nutshell, available houses aren’t where the demand needs them to be, ergo there are local supply issues. Building more homes in economically attractive areas would cool off prices.