1. There is a fixed amount of realestate that must be shared by a growing population.
2. Inflation means the cost of everything is increasing. Why wouldn’t that provide significant upward pressure on homes?
3. Local governments spend a lot of effort maintaining high real-estate values. You can’t fight city hall.
If someone can just afford a $800,000 mortgage payment at 2% they won’t be able to afford $800,000 at 6%.
U.S. Population Grew 0.1% in 2021, Slowest Rate Since Founding of the Nation [0]
> 2. Inflation means the cost of everything is increasing
I agree on this one
> 3. Local governments spend a lot of effort maintaining high real-estate values.
Increase in total inventory increases local government overall income and solidifies the need for their own bureaucracy. (i.e. local government would love for their little kingdom to grow to the sky, in my experience... my experience being Morgan Hill, CA)
[0] https://www.census.gov/library/stories/2021/12/us-population...
Such events have happened in other countries, and if it happens here, home prices will keep going up, wages will go up, and folks will at best be able to afford the same things but most likely less.
I don’t think a crash will happen (maybe it’s going down, maybe not, but definitely not a crash) and I believe we are moving in a direction where less and less people will own the home they are living in. It’s sad really but this is what late stage capitalism looks like.
As for people that want to buy a home? buy one if you can afford it. don’t try to time the market, don’t worry about crashes and bad deals. Just do it. In 10 years what happens right now will not matter.
If there were a crisis in home ownership you'd expect it to be at historic lows.
This is what capitalism hamstrung by government regulation looks like. In many areas builders can't respond to demand and make a profit due to heavy regulation of construction.
as long as the rent isn't increasing faster than inflation, why should there be a problem?
You don't need to own the home to live in a home. And if you own the home, it doesn't mean the cost of shelter isn't paid by the owner (it's just more invisible a payment).
However it will likely keep going and then crash more than fizzle.
As long as the interest rate is below the rate of inflation, you'll make money by borrowing money and trading that money for something pegged to inflation, like a house.
This will work in the short term, and so I think people will keep buying.