Just practicing thinking through this with my knowledge of finance and economics... The worth of an investment is the sum of all its discounted future cashflow

Just practicing thinking through this with my knowledge of finance and economics... The worth of an investment is the sum of all its discounted future cashflows multiplied by some sort of risk factor that depends on standard deviation of those flows, plus the value of the option of being able either to expand or liquidate the investment at any time. The price of an investment can be different to their intrinsic worth (which can only be estimated), especially during peaks of booms and busts. The worth of a consumer good is how much marginal benefit the consumer derives from the good. By saying "1/3 of US Homes Cost More to Build Than They're Worth", they imply: 1. For new homes that are investments, the current price is too high compared to their intrinsic worth. 2. For new homes that are built to be lived in, somehow the marginal benefit derived by the owners has now dipped below the cost to have built it. Dang. Of course, [2] sounds ridiculous. So the third of homes they are referring to must all be investments. They want to say house prices are going to keep falling because its still too high, and that no one is buying new homes, so fewer people will build them. What happens if no one is building new homes? Supply is reduced... What happens then is now left as an exercise to the reader.