than those that did not ; see christopher t. stanton and pratyush tiwari ( 2021 ), “ housing consumption and the cost of remote work, ” nber working paper series 28483 ( cambridge, mass. : national bureau of economic research, february ), https : / / www. nber. org / papers / w28483. - 7parents ’ homes, this change appears to have largely reversed by the end of 2021. the fraction of adults aged 18 to 30 who are the heads of their own households is now back near its 2017 - 2019 average. the surge in the number of households has pushed down housing vacancy rates from already - low levels. rental and homeowner vacancy rates fell considerably during the pandemic, reaching lows in the fourth quarter of last year that haven ’ t been seen since the 1980s. the pandemic - related changes in demand for housing, rented and owned, coincided with a longer - run increase in demand to live in certain parts of the country. for the past several decades, demand for living in cities with high - paying jobs and many urban amenities has surged, pushing up housing costs in these areas. among metro areas in the top quartile of local housing demand, population increased 80 percent, and singlefamily home prices rose more than 110 percent from 1990 to 2019 after adjusting for inflation. 6 for the nation as a whole, population only increased 32 percent and house prices rose 59 percent. while this trend towards urban living supported commercial real estate demand and prices for years, post pandemic, more people are working at home and there has been a corresponding decline in demand for office space, particularly in downtown areas. office entry card swipes are down 50 percent from pre - pandemic levels in large cities, and office vacancy rates are up nationwide, from 12 percent in 2019 to 16 percent in the fourth quarter of 2021. the increases have been larger in urban areas, and particularly in the downtown areas of big coastal cities. we ’ ll need to see if people continue working from home. while low covid case rates may induce some workers to return to the local housing demand is estimated as the sum of the growth rate in the population and the growth rate of inflation - adjusted home prices from 1990 to 2019. - 8office, some may only return part - time, while others may not return at all, as many organizations have made adjustments to function effectively with remote workers. that ’

s the demand side. the supply side has been pushing in the same direction — towards tighter housing markets and more expensive shelter. u. s. housing supply has probably been more constrained lately than at any time since the end of world war ii. one estimate is that the current growth in the supply of new housing units is about 100, 000 less per year that would be needed to support trend increases in demand from household formation and replacement of depreciating units. 7 supply adjusts to changes in the economy more slowly than demand because of the time it takes to plan and build. with workers at home and supply bottlenecks, there were pandemic - related drops in the production and importation of many construction materials. these supply shortages contributed to skyrocketing input prices. in january 2022, lumber prices included in the producer price index were 92 percent higher than the 2019 average. even with increased materials costs, suppliers have been unable to keep up with demand. the volume of lumber now being sold is more than 150 percent higher than last august and is similarly larger than the average volume over the previous ten years. 8 labor is also a key input in home construction. the supply of construction labor, like other sectors, has been held down by pandemic - specific issues like early retirement. one measure of labor market tightness for the construction industry increased steadily from 2010 to 2019 and then in 2021 was more than double the level recorded during the construction boom of the mid - 2000s. 9 jim parrott and mark zandi, “ overcoming the nation ’ s daunting housing supply shortage, ” https : / / www. urban. org / research / publication / overcoming - nations - daunting - housing - supply - shortage see trading economics ( 2022 ), “ lumber, ” webpage, https : / / tradingeconomics. com / commodity / lumber. this measure of labor market tightness is the job openings rate divided by the unemployment rate. - 9local land use regulations have also played a role in constraining housing supply over the past several decades. probably not by accident, these regulations have tended to be more restrictive in areas with high housing demand. there has been a growing public debate about these restrictions on local home building, not just at the local level, but among governors and state legislatures. while some local regulations have been changed to allow more housing construction in high demand areas, the effects will take time, and it remains to be seen whether