The hottest Supply & Demand Substack posts right now

There is a huge underestimation of the housing shortage in the U.S. Many professionals are saying we need less housing than we actually do.
Current data shows there are about 15 million vacant homes, but many more are needed due to population growth. Estimates suggest a shortage of at least 15 to 20 million units.
Building more homes can help lower rents and make housing more affordable, but there's a risk that new constructions may only be rented out at higher prices, especially if ownership becomes less accessible.

Rising prices are primarily driven by increases in the money supply rather than businesses simply trying to boost profits. Consumers ultimately decide if they accept the prices set by suppliers.
Price controls may seem like a solution to high prices, but they can lead to shortages and hurt the production process. This could lower the living standards of the people they aim to help.
Inflation comes from central banks increasing the money supply, making it so there is more money chasing the same amount of goods, leading to price increases.

Asking rents have been decreasing recently, with some areas seeing a drop of 1.1% over the past year. This trend shows that the rental market is facing challenges.
Vacancy rates for multifamily homes are high, sitting at a record 7.2%. This means there are more empty rental units than before, which can put more downward pressure on rents.
While single-family rent prices are still higher overall, their growth rate is slowing down. This could be beneficial for renters who are struggling to keep up with rising costs.

Setting a price and controlling a price are two different things. A company can announce its prices but still have little control over them due to market forces.
The actual burden of taxes or economic influences doesn't change based on who is responsible for payments or price announcements. What matters is how supply and demand interact in the market.
Competition and market structure are what really determine pricing power. Even if a firm sets a price, its ability to change that price depends on the competitive environment around it.

People and firms think about costs as opportunity costs measured in present value, so choices depend on the full stream of future costs and benefits, not just today’s price.
Firms often keep prices stable or use lotteries and loyalty allocations to avoid creating search costs and to protect future demand, preferring reliability over squeezing short-run revenue.
Employers respond to temporary labor shortages with one-time bonuses or short-term measures because they factor future wage paths into hiring costs, avoiding permanent wage raises that would raise the present value of labor costs.

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Asking rents have mostly stayed the same over the past year. While there have been slight month-to-month increases, overall rent growth has slowed down.
Different sources report varying trends in rents, with some noting recent decreases while others show modest increases. This suggests that the rental market is a bit mixed right now.
Factors like increased supply of rental units and changing immigration policies are affecting rents. These influences may continue to shape the rental landscape throughout the year.

Asking rents have mostly stayed the same compared to last year. Recently, there's been a slight downward trend, but rents are still high compared to earlier years.
The number of available rental units is increasing, leading to more options for renters. This rise in supply is helping to keep rents stable and pressures on affordability.
Single-family rent growth is at its lowest in over 14 years. Even though rent increases are slowing, demand for rentals is expected to remain strong due to job and wage growth.

Understanding supply and demand is key in economics. This helps clarify how different market forces interact and what might cause prices to change.
Trade discussions often get confusing when people forget that supply and demand still matter. Prices adjust based on how much people want to buy or sell, which affects everything from investments to economic growth.
Thinking through basic economic principles can help avoid confusion. It's important to clearly identify what factors cause changes, rather than just relying on accounting rules or assumptions about the market.