There's just not enough houses, period. "Inflation" is a catch-all term. If you want the price of something to come down in any natural way, the only way to do so is to produce more of it.
These interest rates are only high by comparison to recent times. Historically, they're actually low-mid.
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This is true, but they need to be 10 million STARTER homes (2/3 bed 1/2 bath) and they need to be in cities of populations less than 1 million people.
1985
Median income $23500
Median home price $84300
Interest rate 12.43%
2023
Median income $56600
Median home price $416000
Interest rate 7%+
Yeah the 1980s where a lot more affordable.
Except you can't.
There are myriad political reasons why, logistical reasons why, and time reasons why you can't just magic 10 million more houses into existence. And to think there's anything 'natural' about the US housing market, or any market in the US for that matter, is nonsense.
If we're talking about things that would be nice but can't happen, I have a huge list to add here. But this is the investing thread, so let's try not to start that derail.
WuT?
This is like saying the sky is blue, because there rocks in my yard. How does one relate to the other though?
split from investing general discussion thread.Renovation industry picks up a lot of the slack when people are not moving. Does this really need to be explained. New home sales are up...
As a layman on the topic and someone who lives in an area not likely impacted, I'd be 100% for a federal program to build housing if it moved people out of cities and areas with housing issues. For a lot of market sectors the advent of low-latency, high-bandwidth broadband in rural areas via Starlink makes this a ton more feasible. All these white collar workers crammed into city-shitholes is making less and less sense and the federal govt getting ahead of that with a bill that used the idle hands of the DoD to build housing would be great. Again, I'm an ignorant layman on the topic.
I'd also half-seriously be OK with a program that moved the homeless into what would amount to widely distributed labor camps in Montana.
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