Part 7/10:
Housing supply elasticity—the responsiveness of housing construction to rising prices—also plays a pivotal role in the affordability conundrum. An analysis found that both New York and San Francisco score near the bottom for supply elasticity, meaning when prices soar, builders are often unable to respond with new construction, perpetuating the upward cycle of rents.
In contrast, metropolitan areas in Texas and the South exhibit a higher capacity for supply elasticity, along with other cities like Washington, D.C., Denver, and Minneapolis, which demonstrates a healthier balance between demand and construction.