Problem
In 2022 demand for housing increased substantially across the US as more Americans working from home moved to the suburbs to find freestanding homes instead of apartments. At the same time the supply of housing has decreased because of supply chain shortages which made it harder for construction companies to build houses and also because of strict council regulations which specify how land can be used. Source: Kenan Institute (2023).
What are the effects on the equilibrium price and quantity of housing as a result of the situations described above? Draw a diagram to support your answer.