There’s a shortage of homes on the market, and it’s driving up house prices and rents, especially for average earners living in high-cost markets.

This is the big takeaway from Harvard’s massive study from the Joint Center for Housing Studies released this week on the state of the nation’s housing market.

The gist is that the housing market is constrained by production that has been below historical levels for more than a decade.

In late 2018, the housing market lost steam as interest rates rose, and new construction, home sales and home price appreciation all slowed. Even as rates came back down in early 2019, things did not let up.

The report calls the housing market’s 2018 cooldown “somewhat surprising” given the strong state of the economy at that time. It pinpoints the lack of affordable housing as the “primary culprit.”

“The tight supply of homes for sale is keeping the pressure on prices in much of the country, while high land prices, labor shortages, and restrictive land use policies limit development of moderate-cost housing,” the report states.

At the same time, the nation’s homeownership rate has been trending upward, jumping 2.8 million from 2016 to 2018. This puts added pressure on the market, as more competition for a limited stock drives house prices upward.

The report questions whether the market is capable of supplying housing that is affordable for most households.

“If current housing supply trends persist, house prices and rents will continue to rise at a healthy clip, further limiting the housing options for many,” it states, suggesting that public and private sectors convene to address the issue.

“To ensure that the market can produce homes that meet the diverse needs of the growing U.S. population, the public, private, and nonprofit sectors must address constraints on the development process,” the report states. “And for the millions of families and individuals that struggle to find housing that fits their budgets, much greater public efforts will be necessary to close the gap between what they can afford and the cost of producing decent housing.”

“While demographic trends should support a vibrant housing market over the coming decade, realizing this potential depends heavily on whether the market can provide a broader and more affordable range of housing options for tomorrow’s households,” it states.