By Elizabeth Zach, RCAC staff writer

house frameAlthough most housing analysts single out construction costs as driving home prices, a recent study suggests that today land prices may influence prices even more.

The study, conducted by the Joint Center for Housing Studies at Harvard University, is based on data from the Federal Housing Finance Agency (FHFA). The dataset, which covers the years between 2012 and 2017, drew largely from urban areas, however, the study results appear to hold true for less populous areas of the country, too, particularly in the West.

“Prices increased by more than 50 percent in over 13 percent of counties and more than doubled in three percent, nearly all of them in the West,” writes Alexander Hermann, a Joint Center research analyst.

Hermann also notes other key drivers of these rapidly rising land values, such as labor constraints, building materials costs and construction regulations.

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