The cost of home affordability is far more reaching than just the home market. It drives the construction economy, retail, improves the financial industry through multiple channels, and it establishes long-term financial viability in families with savings, equity and stability in launching the next generation. Having this keep community element out of reach due to price and now the cost of financing is going to a bit if death spiral if left to continue.
This is one of those areas where the capitalism purists will continue to argue too bad, so sad, the market should be free, and the socialists will argue housing should be subsidized for everyone. Neither are correct at a practical level for sustainability of community and economy. While maybe the idea of the American Dream should be modified, clarifying people aren't entitled to a backyard, two-story and picket fence front lawn, the ability to reasonably access permanent housing is essential for long-term economic viability. Ignoring this matter or leaving to the market is simply kicking the can down the street to tomorrow's generation under worse conditions.
It takes one year to save for a down payment on a $500k home (3.75%) if you go full monk. Suck it up and quit crying.
I can't fathom how you think the current situation qualifies as "leaving it to the market".
Simple. The market isn't doing anything to help buyers get into a home. It's simply about getting the highest price and has been for years. The capacity to build homes has been plenty, but builders and developers bleed out small subdivisions, 10 homes at a time, to maximize return. That's not about moving inventory; it's about maximizing net profit. Building quality is crap as well. It used to take at least six to eight months to build a home properly. Now it's done in less than three. There is no AI or great technology involved, just lesser quality materials and work applied. That in turn maximizes net profits as well with cheaper labor and cost of goods sold. Finally, with the loss of viable tax credits and financing cost going up, entry is even more expensive than it was. Instead of passing laws to help first-time homebuyers, legislation is passed to wipe out those benefits as well as eliminate the mortgage interest deduction, all of which play into making homes affordable. Yeah, I can't "fathom" it, right.
It seems like you're unaware of the myriad government interventions in the market, many specifically aimed at propping up housing prices because high appraisals are where property tax revenues come from. That's what capitalists are talking about when they want to let market forces bring prices down. You do yourself a disservice when you strawman other people's arguments.
I have simply laid out the truth of what has been happening in the housing market. Yet you insult me twice without provocation, essentially inferring I'm stupid or ignorant. As a homeowner active in real estate, it is well known this market is highly inflated. Anyone trying to defend it is either blind or part of the problem. The actual cost of building is far less, but everyone is gouging, including cities with development fees. If the nonsense was eliminated housing would be far more affordable but there are too many vested interests resisting an elimination of the money grab. Granted, the west coast is far more expensive than the midwest or lower east coast. However, because of that fact, now those markets are seeing migration and getting pummeled. Our west "problem" is quickly becoming your problem elsewhere because people need a place to live.
What do you propose to do? Whip people until they get less greedy?
Simple and it's already happening - stop buying homes to force prices down. Simple supply and demand with aggressive consumer withholding. Don't play the game, then the game has to be rewritten.
Why shouldn't the solution be to relax rules of what can be built? Why shouldn't lots be upzoned from single family to multifamily so the same space can house 4 families instead of 1, for example?
Let builders build more and prices will naturally come down.
I would agree with this approach, and much more of it is needed. The resistance here comes from existing homeowners and residents with a NIMBY attitude that higher density housing brings down existing home values and neighborhood appeal. This is something people are going to have to get over. Again, the consumer American Dream of the picket fence has to change.
That's letting the market work it out. I thought that wasn't a realistic option.
I agree. It's a drastic approach. And it's one people will have to take when the market and government won't do anything to help because they are too interested in their short-term benefit versus long-term community stability (the other point I was making in my original post).
I wasn't intending insult. It just struck me as rather conspicuous that you completely omitted the most significant systemic factors driving up costs to focus on superficial and transitory ones.
The position that it's the fault of appraisers is scapegoating. The builders are in charge of the price they set to market along with the developer owner and the financers. Yes, cities and local governments have a piece of the blame with their development fees on the land before even a shovel is applied, but that's $25,000 to $40,000 of the price that pays for everything publicly accessible in the neighborhood for the next decades. So it's expected.
Beyond the cost of build, the profit margin of housing construction is insane gouging with controlled supply choked on purpose. 100 homes could be put out in a subdivision, but instead it's ten to keep to maximum price points in place via short supply. That's not an appraisal issue, it's market manipulation. Could consumers go elsewhere instead? Technically yes, but in practice who is going to uproot and leave their job in one region to get a home $200,000 less in another? Very few, especially with families. The argument builders make is that their profit margin from a home sale isn't that much, 20% gross and less than 9% net. So, on a home today of $600,000 that's $120,000 and under $60,000. What those same builders and developers are not saying is that they use an aggressive vertical model where they company owns all elements of the build, from financing to the drywall crew, thereby controlling their operating cost and adding to company covers. So is it really a net 9% or more like 30%? Fuzzy math here in practice.
Cost source: https://eyeonhousing.org/2025/03/builders-profit-margins-improved-in-2023/
I'm not blaming the appraisers. It's not their fault valuations are artificially high.
It's also not developers' fault for profit maximizing their business. The problem is the artificial scarcity enforced by zoning laws and building codes, the subsidized lending that drives up demand, and the persistent central bank money printing that shackles so many people with golden handcuffs.
Housing is only expensive in certain cities, and those tend to be cities with the most anti-market rules about what can be built, where.
That can't be right. Those must just be the cities with the most greedy developers.
Conoci personas que tardaron fácilmente 10 años solo para hacerla y para ahorrar para comprarla en México nos endeudamos con el Infonavit y a veces hasta 25 años por una casa ya habitable
For reference. Crazy ass pricing.