Real House Prices Are Declining: The inflation-adjusted Case-Shiller house price index fell 3.5% from January 2025 to April 2026, continuing a downward trend that has received little attention amid ongoing debates over zoning reform.

Construction Slowdown Driven by Interest Rates, Not Zoning: Housing starts dropped from ~1.7 million units annually in 2021–2022 to ~1.4 million recently primarily due to Federal Reserve rate hikes, not tighter zoning; continued high construction would have added more units and lowered prices further.

Rapid Price Declines and Rising Insurance Costs Pose Trade-offs: While lower prices improve affordability, sharp nominal drops could wipe out equity for many younger homeowners (37% of under-35 households own homes); meanwhile, homeowners insurance costs have risen 110% over the past decade, largely due to climate-related risks, further straining affordability.

I happened to look at the Case-Shiller house price index, and I was struck by something that seems to be getting very little attention. It’s falling.

This is noteworthy because it seems the folks screaming about the need for zoning reform haven’t noticed. As readers may recall, a couple of weeks ago I had a little fun with New York Times columnist Binyamin Appelbaum (who is generally very insightful) because he thought he found the secret to curing the housing problem.

The remedy was in Vancouver, British Columbia, where an indigenous tribe had won a settlement that gave them control over a parcel of land in the city. Under the terms of the settlement, the tribe would be able to build whatever they wanted on the parcel and would not be subject to zoning restrictions. Appelbaum considered this great news because they were allowing a number of high-rise condominium buildings to be constructed there.

As I pointed out in my piece, building in Vancouver does not seem to have been excessively constrained by zoning restrictions.

“The........

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