House prices rose in real terms from 1990 till after Covid. They have not moved up since 2024. Why? Because since the late 1980s the price of debt has been steadily lowered from high teens to close to zero, thus inflating debt leveraged assets including housing. From here on prices will stagnate if not decline. The fiat monetary system cannot sustain much higher interest rates or defaults would escalate. Nor can the price of debt lower much more because it is already close to zero in real terms adjusted for inflation. Owning a home gives security of tenure, as long as you can keep up mortgage payments, but as an investment housing is now in most locations, likely to be less rewarding than most people expect. With debt leverage, your equity can be wiped out with a modest fall in house prices.
House prices rose in real terms from 1990 till after Covid.
They have not moved up since 2024.
Why?
Because since the late 1980s the price of debt has been steadily lowered from high teens to close to zero, thus inflating debt leveraged assets including housing.
From here on prices will stagnate if not decline.
The fiat monetary system cannot sustain much higher interest rates or defaults would escalate. Nor can the price of debt lower much more because it is already close to zero in real terms adjusted for inflation.
Owning a home gives security of tenure, as long as you can keep up mortgage payments, but as an investment housing is now in most locations, likely to be less rewarding than most people expect.
With debt leverage, your equity can be wiped out with a modest fall in house prices.