Understanding housing demand dynamics through two indicators, income growth and population growth, provides important insights into housing affordability. Research shows that average U.S. income growth is strongly related to rising house prices but is essentially unrelated to changes in the supply of housing units across metropolitan areas. Instead, greater population growth translates into greater housing supply growth, with housing supply generally outpacing population, even in expensive markets. Thus, differences in affordability across areas may reflect differences in the growth and type of housing demand rather than different housing supply constraints.