7 Charts Show the Housing Tipping Point Has Arrived

Should YIMBYs prepare to gloat?

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The big housing story for the first two months of 2024 has been about multifamily supply. Fast Company calls it “the largest influx of multifamily housing since the Nixon era.”

People have been clamoring for more housing for years, and finally, it seems the housing industry is delivering. Some people are calling it a wave of supply, I think it sounds more like a tsunami — 55,000 units of housing are under construction in Dallas, for example, after delivering 20,000 units last year.

For the past decade, YIMBYs have argued again and again that we just need more supply to address the housing crisis. But critics have pushed back because despite lots of new housing, many cities have still seen their housing prices go up. There are even arguments that producing new housing will raise prices because new housing signals a healthy market for higher priced housing.

But you need an overwhelming amount of housing to actually put a dent in housing prices. And this is why we may finally be at a tipping point. Cities are finally producing overwhelming amounts of housing. YIMBYs: get ready to gloat.

The Law of Supply and Demand Sometimes Works!

Minneapolis, the first major American city to permit multifamily housing citywide, is consistently trotted out as the poster child of how housing prices are a function of supply and demand. Minneapolis has been building a lot of housing, and rent prices are going way down there.

But Minneapolis isn’t the only city producing lots of housing and seeing rents decline. At the end of 2023, Avison Young put out a report on the state of multifamily housing noting that increased supply is already having an effect on cities:

“Over 1 million new units have delivered across the top U.S. markets since 2020, increasing the multifamily supply by almost 15%. The increased supply has slowed overall rent growth, as half of U.S. major markets have seen effective rents decline over the last 12 months. ”

Indeed, when you look at the rest of the country, new inventory growth is correlated with declines in rent.

Will this supply boom be enough supply to prove economic theory right? Or is this a once-in-a-generation supply boom that will be over just as soon as it started?

Here are a bunch more graphics to help us understand what’s really going on.