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In my neck of the woods (New England), home prices have doubled since March of 2020. I have yet to read a comprehensive overview of how this happened and how we

• anthonypasq 4mo ago
  covid was the largest money printing and wealth transfer event in history. When rich people get money they buy assets. We have had extreme asset inflation since then. Metals, equities, real estate etc. Watch Gary's Economics on youtube. We get out of it by building more, read Abundance by Ezra Klein and Derek Thompson. Its extremely simple.
  • deleted 4mo ago
    [deleted]
  • lifestyleguru 4mo ago
    There is one hackish solution though. Unilaterally implode the real estate prices worldwide. People were so busy stealing covid money that they simply dumped the loot into real estate. This will not trickle it down (nothing ever trickles down), but at least would evaporate it.
• amazingamazing 4mo ago
  It is very simple. Housing is not built.
  • pc86 4mo ago
    This is at least 80% of the problem. The system is behaving exactly as you'd expect it to with even an Econ 102-level understanding. New supply isn't being built, or is being severely hamstrung, and more people want the supply and are willing to sacrifice (often too much) to get it. Add in rent-seeking behavior, both figuratively and literally, and prices quickly double in even mediocre areas with minimal long-term prospects for growth. Relaxed zoning requirements for SFH and MFH buildings, relaxed or eliminated height restrictions for high rise density projects in urban areas, eliminating rent control, and a laundry list of other things would help alleviate the upward pressure.
    • jermaustin1 4mo ago
      Even if new stock were built, new homes in Houston start around $300k for a 3/2 configuration, but those are bought up nearly instantly because not many are built, and the remaining stock are $400-700k. I grew up with 6 family members in a 3/2 house that was 1250sqft. Houses today start at 2000+ square feet in the USA. We DON'T need that. On top of that, there is very limited stock of homes for people who no longer have kids. Every type of manufacturing in the US has gone toward lower throughput, higher price. Luxury apartments, 2500 square foot houses with no yard, $50k for a car. And it is because we are all comparing ourselves to each other and wanting to appear like we can afford this lifestyle, and its finally breaking. But it was allowed to go this way, because it was working. Pricing out the bottom 25% didn't negatively affect the profitability of the companies making these items, in fact, it made them more profit.
      • pc86 4mo ago
        The answer is still build more (which you basically admit yourself in your first sentence). Homes skew larger and more expensive precisely because it's so hard to build them so developers need to make more money from each one. The fixed costs per unit are too high, so the ones that need to be lowered or eliminated should be. That will incentive building more units not just more expensive units. You'd see a lot more 1200sqft new builds if it was more economically viable and developers could make a profit on a $125k home instead of needing $400k.
        • jermaustin1 4mo ago
          > You'd see a lot more 1200sqft new builds if it was more economically viable and developers could make a profit on a $125k home instead of needing $400k. You do see them, but they are factory built. I could have a $75k manufactured home dropped onto a $20k slab, with $15k utility hookup, and have 3 beds and 2 baths and 1200sqft. It is viable outside of HOAs and "master planned communities" but it is hard to find places in the US that allow this in a "desirable" area. I agree we need more, but we need smaller too. My parents right now have a 3600 sqft house they will die in, and can't maintain because they are in/approaching their 70s. They built it in 2008 for around $190k when there were still 2 kids at home, my grandmother still lived there, and my sister had a baby on the way. Now their home is valued at $750k according to the county (after fighting and revising it down from $800k), and if it weren't for all the homestead exemptions and senior rates and whatever other tax breaks they were given, their property taxes would be over $25k/yr. They've actually tried to sell it a number of times, but 0 bites even discounting it down to $500k, because the town they are in has no comps (single level 4 bed, 4bath on 3 acres).
  • lifestyleguru 4mo ago
    Every amount of new housing will be purchased by competitive investors. You are heavily underestimating the amount of money unsophisticated investors have, and the psychological effect of owning more and more of territory. Most people will never say no to owning more money and territory.
    • f6v 4mo ago
      Tax homes that aren’t your primary residence to the point where it’s not a good investment.
      • lifestyleguru 4mo ago
        This never works in real economy with real people. Even in Germany with very rigid address registration laws people invest in real estate like there's no tomorrow. In other countries with lax address registration laws like Poland, real estate can be the only investment vehicle without capital gains tax. Yes, if you sell real estate in Poland after 5 years you pay zero capital gains tax and anyone can buy (please invest and make that mofo pop). Opposite to every other investment vehicle from bonds to shares to even currencies where the capital gains tax exists. It's just pure rectified human greed.
    • runako 4mo ago
      In the context of rentals, wouldn't we expect ~100% of private sector rental units to be purchased, owned, and operated by investors?
    • epistasis 4mo ago
      So what, they will rent it out? If there's a lot of new housing being rented out, it drives down the rental prices, drives down the purchase prices, etc. Any investor that sits on vacant housing is losing money. When there's extreme shortage landlords can do this because the rise in value happens from the shortage and maybe the rents aren't worth it. The only cure to investors buying housing is to build enough housing to keep it from being a good investment.
    • littlexsparkee 4mo ago
  • wmwragg 4mo ago
    I think there is another element, private equity (PE) has got involved in the housing market, and like anything that PE gets involved with it burns it to the ground and then exits with it's profit leaving behind a wasteland. PE equity will do anything to get their profit no matter who it hurts
    • amazingamazing 4mo ago
      This would not matter if housing could be built.
      • xphos 4mo ago
        Yeah I tend to agree with this point. PE is a boggie man for not building enough housing where it matters. In fact if we could build more houses PE could buy it at above market prices all day and builders could boom and eventually rents would drop because PE aren't going to hold empty units because its investiments.
    • selectodude 4mo ago
      Private equity owns about 500,000 homes nationwide, so like less than a half of a percent. Anyway they got into the housing market because the margins are so good because everybody refuses to allow new housing to be built. Congratulations, you played yourselves.
      • smallmancontrov 4mo ago
        > you played yourselves Owners played non-owners
      • Rury 4mo ago
        Does it matter if they only own a small fraction of the homes? There's some studies that show that in markets where institutional investors do buy, prices typically noticeably increase for houses afterwards, even if they only own a tiny fraction of the housing units. There's plausible argument as to network effects (e.g. my neighbor is charging that much, so why can't I?), as well as changing unit types to rentals, limiting owner-occupied supply and hence driving up prices. I mean, I imagine it can be kind of similar in the stock market, where that you don't actually need to buy all a company's shares in existence to bid up a stock's price... you only need to buy enough of the available float to raise prices (sometimes which can be <0.5% of shares in existence).
  • TFNA 4mo ago
    The price of homes has drastically gone up even in some communities around the world where no housing is being built because there is no demand for it; the given region is experiencing severe depopulation as everyone leaves for the faraway big city, except for a few elderly holdouts. Yet owners feel some kind of pressure to keep their asking prices high. To me, that means the situation is far from simple.
    • amazingamazing 4mo ago
      Areas even in the USA where housing is not built but people leave and there is low demand are very cheap.
  • throwaway041207 4mo ago
    This reductionism doesn't seem useful. The population of people who want to buy homes has not grown in any way that is proportional to the cost of a home.
    • pc86 4mo ago
      I've yet to hear anyone say why "build more" isn't a valid answer to lowering the cost of housing. Even if new builds stay at exactly the same price they're at today, the price of older homes will decrease as supply increases. And I don't just mean in this thread, I mean ever. It's always hand-wavey "it doesn't work like that" when the evidence suggests that it does.
      • altairprime 4mo ago
        The underlying issue is that converting single-family suburbia to medium-density multifamily ‘ruins the neighborhood’, and cities don’t have the courage to eminent domain homes and replace them with apartment buildings themselves, so they outsource the housing function to the Free* Market, which is most definitely not interested in terminating the SFH market. Between the profitless-ness of apartments for the real estate industry and the use of suburbia zoning to discriminate since the early 20th century (nowadays in the guise of HOAs), the problem to solve isn’t in housing or urban planning, it’s in dethroning capitalism and classism. That’s why no explanation presents itself for why more housing isn’t a good idea: it’s a fine idea, but the U.S. ethos of ‘fuck you, got mine’ takes precedence, and it’s uncouth to say that out loud here.
        • rjsw 4mo ago
          Commercial new-build apartments happen elsewhere in the world, plenty of them in my city.
          • tennfown 4mo ago
            And then it’s $2000/m for paper thin wall and cheapest materials possible and has more stringent qualification requirements than a mortgage.
  • stephen_g 4mo ago
    Not that simple. In Australia over the last 10 years, the number of dwellings increased by 19% while the population increased by a smaller 16% [1]. Yet house prices still doubled. This is the same trend that has continued for decades, growth in number of dwellings has tended to outstrip population growth but house prices shot up since 2001 when the tax settings were changed to massively benefit speculation. We also have a pretty high number of unoccupied dwellings that are left empty, since some investors see the bother of renting them out as not worth the money, since they’ll make so much when they sell that it doesn’t matter! 1. https://australiainstitute.org.au/post/is-population-growth-driving-the-housing-crisis-heres-the-reality/ https://australiainstitute.org.au/post/is-population-growth-...
    • amazingamazing 4mo ago
      We are talking about America. In your case housing would be even higher if it were not built. People continue to make things more complicated than it is. Build, and keep building until it is cheap. Also, you would need to consider the specific places.
      • beej71 4mo ago
        The claim is that if you increase supply the price will drop. The counter-example is a case where supply was increased and the price doubled. The question is why did that happen? It very much looks like the "just build" model is insufficient to explain what's happened in that case.
        • WarmWash 4mo ago
          Because demand outran the supply. Prices drop when demand falls below supply. Not when new supply is added.
          • danaris 4mo ago
            Diiid you read what they said about Australia? > the number of dwellings increased by 19% while the population increased by a smaller 16% That is the opposite of demand outrunning supply.
  • JeremyNT 4mo ago
    You can sprawl further out and you can build infill in sparsely populated areas, but you run up against the reality that desirable areas are going to be expensive because they're desirable, and the cost of demolishing existing multifamily homes to increase density further becomes infeasible in already dense areas. I bet you actually can find affordable housing in the middle of nowhere / towns where people are actually leaving. This is not to say there isn't low hanging fruit that market rate housing can help with, and some areas have more room for improvement that way than others, but there's a limit to where that takes you that reveals a deeper problem: we treat housing as an asset that "should" continue to appreciate indefinitely, and we even subsidize people using extensive leveraging to acquire it.
  • beej71 4mo ago
    I don't think it's that simple. In my town, we're building like mad (thousands of units) and it is possibly slightly impacting pricing in that the rise is not as meteoric as it was 7 years ago. But new buyers are still priced out. Houses are vacant. There must be other factors.
    • shagie 4mo ago
      The cost of land and labor to build a house is relatively the same no matter what house you build. This also applies to apartment buildings. Fancy it up a bit (mostly nicer appliances) beyond that and you take a $300k house to a $1M house. Developers make about 20% on the total ( https://www.nahb.org/news-and-economics/press-releases/2025/04/nahbs-new-study-provides-statistics-and-data-on-builder-financial-performance https://www.nahb.org/news-and-economics/press-releases/2025/... ). They'd rather make 20% of $1M than 20% of $300k. Same work crew either way. Next question then becomes "is it better to sell 3 houses at $1M each ($600k for the developer) out of 10, or all 10 houses at $300k ($600k for the developer)?" This also applies to apartments. Do you build 200 "luxury" units? or 200 affordable ones?
  • antisthenes 4mo ago
    Yes, great. Now ask the "why" housing is not being built. And then ask the next "why".
    • xnx 4mo ago
      Owners don't want it built. Owners vote. Non-residents (and many renters) don't vote.
      • antisthenes 4mo ago
        Wrong. As an average owner I have 0 pull on the local council that instates building codes.
  • tzs 4mo ago
    I'm not sure it is that simple. The housing units per capita numbers on first impression would suggest the number of housing units is keeping up with population growth, raising the question of why that isn't sufficient. Some quick Googling for number of housing units in the US in 2006 and 2026 says 128 million then and 149 million. Population then was 299 million and is 334 million now. That's 16.4% more housing units and 15.4% more population. In terms of housing units per capita that's 0.45 now, and 0.43 in 2006. Looking farther back it as 0.34 in the 1970 census, 0.39 in the 1980 census, and 0.41 in the 2000 census. There was a dip from 2008 to 2016 from 0.428 to 0.419 then it resumed going up [1]. [1] https://fred.stlouisfed.org/graph/?g=Mc22 https://fred.stlouisfed.org/graph/?g=Mc22
    • littlexsparkee 4mo ago
      It's not just about sheer numbers but distribution - the areas where they're most needed are the ones that are building the fewest units, exceptions (Seattle, Austin) aside
  • xnx 4mo ago
    Also, everyone wants to live in the same dozen places.
• vovavili 4mo ago
  >I have yet to read a comprehensive overview of how this happened and how we get out of it Allow me to introduce you to Bryan Caplan - https://www.amazon.com/dp/1952223415 https://www.amazon.com/dp/1952223415
  • greenie_beans 4mo ago
    i would love to hear a YIMBY consider the market forces/how capitalism works and not just reduce it to regulation. aka when it costs over $500k to build a single apartment unit and most of those costs are construction with very little of the regulation burden driving up that cost.
    • vovavili 4mo ago
      >most of those costs are construction with very little of the regulation You would be surprised.
    • pc86 4mo ago
      If we're talking about home prices why are you talking about apartments? There are a lot of costs associated with apartment buildings that simply don't exist for SFH and MFH builds. Apartments are a different beast.
      • epistasis 4mo ago
        Indeed, there's an entirely separate, far more strict building code for apartments than for single-family detached housing. This was an explicit goal of the designers of the early building code split: make single family homes as cheap as possible, and apartments as expensive as possible.
    • forshaper 4mo ago
      Permitting admin is part of regulation, which in turn is required for construction.
      • greenie_beans 4mo ago
• 9x39 4mo ago
  Middle class families can, but young families just don't now. Median homebuyer age is now 56, up from 31 decades ago: https://x.com/heimbergecon/status/1943925791055917417 https://x.com/heimbergecon/status/1943925791055917417 As for how it all happened, I don't have a comprehensive exploration of this to share, but look at interest rates and house sale prices: https://fred.stlouisfed.org/series/MORTGAGE30US https://fred.stlouisfed.org/series/MORTGAGE30US https://fred.stlouisfed.org/series/MSPUS https://fred.stlouisfed.org/series/MSPUS Sale prices begin rising immediately once interest rates dipped to the lowest ever (borrowers could "afford" more principal - sale price - for similar monthly payments). Combine that with houses making up a significant chunk of balance sheets for the US, and we (collectively) are loathe to let prices fall: https://eyeonhousing.org/2024/02/homeownership-is-key-to-household-wealth-2/ https://eyeonhousing.org/2024/02/homeownership-is-key-to-hou...
  • _DeadFred_ 4mo ago
    HN, we seem to care about this. We post a lot about it. Maybe we should put together a site to consolidate this sort of information, work on articulating something insightful about what is going on, and then a system/group/accountability(this is important) for pushing this to our politicians. My grandfather used to do that and the US was improving. My dad did nothing other than vote. I've done nothing other than vote. The US stopped improving. It's easy to setup a ghost website and do nothing though, so we would need a way to hold each other accountable, broken out simple to follow actions to take. Basically a 10 step program but with the steps being political action we hold each other accountable to take.
• tmaly 4mo ago
  If you look at the amount of money created since Covid, this explains a lot of this increase in asset prices. But beyond that, interest rates are a big driver of what people can afford for a monthly mortgage. These rates may come down a little. However, the FED facility that was creating sub 3% rates was likely a once in a lifetime opportunity.
• mancerayder 4mo ago
  Here are two. Suburbs, good ones with low crime, access to jobs and good schools are desirable. Desirability leads to prices going up. Prices going up leads to property tax revenue going up. That budget going up leads to a higher $/pupil for schools, better infra, etc... Increasing desirability. So, not a supply problem. Here's another. Jobs are in cities. People don't like commutes, and value not owning a car if possible. Young people like cities. People go there, causing demand to skyrocket, while companies hire there. Places like NYC and Paris and London are not Houston - unlimited development would ruin the cities. There's no amount of supply that would ever make these cities cheaper. Moreover the land itself is expensive, and the building costs (labor and other costs), so there's a floor to what things should cost. In every one of these conversations on building, you get these Reddit-style upvoted comments akin to 'it's due to zoning and NIMBYism'. Newsflash, the world isn't California. The problem of housing costs has a lot of dimensions. I propose - abolish the property tax paying for schools like in most of the country, and distribute school funds equally at the state level. This would reduce wealth inequality. Second - let's revisit this return to office idiocy. If I have a million dollar apartment in a city, it's because of my commute, not because I necessarily enjoy or want to be there. More than happy to sell it to someone else who'd enjoy it more (a young person - what cities are for).
  • rainsford 4mo ago
    > So, not a supply problem. What do you mean it's not a supply problem? Suburbs and the housing within them aren't naturally occurring features with limited supply. They're not oil deposits. You can just build more of them. Same thing with places like NYC or Paris or London. The point isn't that they need more development, it's that other places need more development so people who want the NYC experience in the US don't have exactly one city to choose from. You don't make NYC cheaper with more building in NYC, you make NYC cheaper by making more NYC like cities.
    • mancerayder 4mo ago
      I'm in agreement in general. I argue against people who think Manhattan should be more dense, or parklands should turn into apartment blocs. The problem with a lot of the US is that the city designs are atrocious - if you can call them designed at all. Americans don't really understand how to create public transportation systems and to urbanize suburban areas. Instead of looking at Europe and copying, we bicker and argue and support this broken idea of local government. Btw, that's not a right or left thing - community groups are touted as a great thing to fight against gentrification, or over development in blue states, and defenders of freedom in red ones. The issue is the multi faceted bickering making it impossible to progress - why don't NJ and LA suburbs not have the best public transportation in the country or world? They easily could. It's just bad government and a lack of centralized planning at the federal level.
• scoofy 4mo ago
  Look at the price of gold. Asset inflation is happening because we’ve 20 years of inflationary policies that hid in equities because of 0%-3% rates. Now that the rates have gone up, that money is chasing lower downside risk investments. Assets and commodities are the safest place to park cash when you can’t trust monetary policy to protect savings.
• xphos 4mo ago
  I think there is a huge problem that the American Zeitgeist views houses as the only way to build generational wealth. It turns housing into an investiment and investiments need to be defended (NIMBY) and it puts a perceptional view that if house values are not rising America or heaven forbid going day the economy is in doomsday. The problem with a house as investiment is that, its 1 consoldated undiversifed asset that ruins you if it goes down. Its bad strategy for your children because it makes it so houses will one day be unobtainable this generation or the next. We can try to build it out but I think a lot of the issues with building houses is that we have a shortage of the people that build houses and its a project that is not really DIYable anymore in the places that need houses. (the last point might be a stretch but you know)