Norway, like a number of other countries, saw steep growth in house prices during the pandemic. This added to past years of strong price increases and has brought renewed concern for housing affordability. Tax advantages to buying homes inflate house prices, contribute to wealth inequality and divert resources from more productive investments. An underdeveloped rental market is an additional consequence of Norway’s pro-homeownership policies. Beyond tax reform and targeted support for low-income households, including renters, lasting improvements in affordability will require measures to enhance the responsiveness of residential construction to increased demand. However, creating room for new housing supply can involve difficult trade‑offs with environmental and other policy objectives.