Hi, I'm Ryan Boyle, Chief US Economist for Northern Trust. I must admit I feel pretty content because my family bought our home a decade ago. We had a safe space to ride out the pandemic, and we were shielded from the house price inflation of that era. I'm not here to gloat. Better lucky than smart. 

Not everyone shared my good fortune. Many who would like to purchase a home are experiencing difficulty in doing so. The main reason is that housing in the United States is critically undersupplied. The crunch has been long in the making. Back in the early 2000s, residential construction boomed. But that was a speculative frenzy. 

When the housing bubble burst, it precipitated a global financial crisis. Property developers were once bitten, twice shy. From 2009 to 2019, housing starts held well below the levels seen in the decade leading up to the crash. But the nation's population kept growing. 

Housing inventories steadily tightened in the pre-pandemic cycle as households, like mine, established ourselves and started families. And then the pandemic left an indelible mark. In 2020, faced with the prospect of sheltering in place, anyone who was considering buying pulled forward their plans. 

But the supply side couldn't keep up. Construction is a slow process, even if land and labor and materials had been readily available. And existing homeowners jumped at the opportunity to refinance their homes at low pandemic era rates, relocating exposes families to both higher prices and higher financing costs, which support the case for staying put. 

Older homeowners are especially reluctant to sell. A high percentage of them prefer to age in place, to preserve their ties to community and to keep their costs of living low. The normal generational release of homes to the market has been deferred. If you put it all together, you find a market with high demand and limited supply. 

The best solution is to build our way out of the problem. But regulations can prevent many types of construction, especially more dense developments. As a result, property prices may remain elevated. When we set out to buy a home, we scrimped and saved to secure space for our growing family. 

Phrases like, aging in place were not on our minds. But at today's prices and rates, our starter home may turn out to be our forever home.