Fed plans to ‘reset’ the housing market–raising likelihood of falling homeprices | Hacker News Reader

Fed plans to ‘reset’ the housing market–raising likelihood of falling homeprices

finance.yahoo.com

41 pointsfairytalemtg124 comments

I’m skeptical that prices are going to fall too much. Go to any Reddit thread on the topic of interest rates, talk to any of your young friends that haven’t bought a house yet, and you’ll find a common theme. “I can’t wait for house prices to fall so I can buy”. Isn’t that the definition of demand? If prices go down 10%, there is going to be a massive number of young people jumping into the market.

I’m wondering if we might see more houses go up for sale, but not necessarily a drop in prices simply because the demand will be there to soak up the supply for a long time.

10% isn't nearly enough. If you're waiting for 10% but your interest rate doubled you're losing out.

That’s why smart money has been happily buying houses up even at inflated prices.

> even at inflated prices

Either smart money or inflated prices, pick one

I’m already seeing a slight correction in Austin, TX. I get an email with an estimate of value from Redfin once a month - last month it was around $640k (up from the $320k I paid for it 5 or so years ago) and this month it was 600k. Before this month it had steadily climbed every single month since the pandemic rebound.

Talking about wanting to buy a house isn’t the same thing as actually being able to afford one though.

The definition of demand is quantity demanded at every given price level. With mortgage rates rising, the size of loans any individual can take out at every level of wealth/income is dropping significantly.

At the end of the day, you can want to buy all you want, but unless you have or can get the money, it’s a moot point.

> If prices go down 10%, there is going to be a massive number of young people jumping into the market.

Prices were 10% lower before last year and were was this massive amount of young people then ? Waiting for a 10% drop too

If nominal prices go down during inflation, real prices go down further.

> “I can’t wait for house prices to fall so I can buy”.

By the time housing is 20% off the peak, unemployment will be raging and those people will have lost a lot of their life savings in crypto and the stock market. Without jobs and saving they won't be stepping into the market to buy. Meanwhile forced selling by people who were overly leveraged will cause a supply glut.

I understand that some catastrophe or economic collapse could cause all of that, but I don’t think it’s a necessity for unemployment to skyrocket if house prices dip 20%. Also what makes you think any of this is connected to crypto?

The economy is all linked together in positive feedback loops.

With a mortgage, the side-lined young people who couldn't afford a house at 3.5% interest rate still can't afford the same house after a 10% price drop at 5.5% interest rate.

Oooh, i just sold a flat here in europe with the intention to buy something bigger. It would be fun if i bought it back next year at a lower cost or if house prices dropped just as i buy a new one. With rising interest rates and inflation it will be the little people that will suffer. Because those with liquidity available will buy properties at a discount, while regular folks wont afford them anyway since everything else costs more.

My wife and I just started saving to buy a house, and I was resigned to the fact that we would have to buy into a super-inflated market. From my perspective, hearing this from the Fed is great news, but I realize that my own personal bias probably clouds my view quite a bit.

Realistically, the only real power they have to decrease house prices is to massively increase interest rates.

Unless you've saved enough to buy a house outright, you'll probably end up paying in interest what you would have paid in principle. Whether it ends up being better or worse for the average buyer remains to be seen.

> you'll probably end up paying in interest what you would have paid in principle

Is that a better outcome from a mortgage interest deduction perspective?

Do US rates affect the price of housing in Europe?

There is a relationship, yes, but it’s fairly indirect. More important is simply that the ailments of the US are suffered by the west in general. The UK raised its interest rate this week, by less than the US, but with a feeling that a much larger rise will come in August.

Depends but overall the US rates put pressure on euro and generally all other currencies. In my country, which does not have euro, the last hike of the US rates got the currency to drop over 2% (which is already super weak). This means that our central bank will need to bump its rates even further.

All of europe is having similar issues. Many eu countries and the uk have increased their rates to try and stop inflation and as a result fewer people afford mortgages driving prices down. But the issue in some places is that builders have stopped building due to increased costs and as such the offer is lower. No clue how things will play out.

Long term, inflation tends to reduce income inequality (up to a point, I've generally seen 10-15% quoted as the sweet spot).

The problem with inflation and poor people is more short term: wages are one of the last things to inflate, so there is still a short term drop in buying power. This applies to everyone relying on wage income, but the poor have the least slack to manage it.

> wages are one of the last things to inflate

of alternatively they dont inflate at all and you lose a lot of purchasing power.

Good. I had a house I sold in 2019 that has "doubled" in value since then. I couldn't imagine paying that much for that little house.

It's not like people have had a choice.

Why is there suddenly such a shortage of housing though? There can't have been suddenly more people?

I think Toronto has a huge problem with foreign investors driving up housing prices, so probably more of that

Housing valuation over the last decade is not entirely dissimilar from crypto valuation over the same period.

But while they are both irrationally overvalued, you can’t mine for new housing stock.

Because the other side of supply is demand. Demand increased as 2 income couples now want to both have a home office to work from home, salaries went up from the great resignation, savings increased due to lack of anything to spend on, and rates were incredibly low. Basically the perfect opportunity that made everyone ready to buy at the same time. Some amount of people moved from a HCOL area to a LCOL area and kept the same salary so they could afford to spend more as well. This all led to the people thinking they need to buy now or they are going to miss out which further increased demand.

I deeply suspect it's got a lot to do with interest rates pushing investors into the residential housing market who never would be there outside of these conditions. When a market is entered by participants with vastly more resources than previous market players valuations change vastly.

Building was paused for about a year (Covid and lumber prices), so there are a ton of new builds that didn't happen or got delayed. New Construction was already barely keeping up or falling behind pre-pandemic. Covid also caused a massive swing in what was desirable housing, small city apartments are a lot less attractive when lockdowns were possible so demand moved to places that weren't prepared for it.

In the US, about a third is being purchased by Wall Street investors. There's a relatively recent Washington Post article about it.

> It's not like people have had a choice.

Buying vs renting is a choice

Rents have increased by a similar factor, as the markets are linked. If you can buy, you can choose between buying and renting, but you can''t choose not to to pay a large increase on a little house one way or another.

What's more, unlike long term fixed rate mortgages, rent tends to increase every year according to market conditions, so when renting you can't avoid the increase by staying where you are.

> What's more, unlike long term fixed rate mortgages, rent tends to increase every year according to market conditions

Market conditions means rents can decrease too

And unlike mortgages you can’t finance rents - it’s based on what the tenants are willing to pay

The problem is that we've been spoiled with crazy low interest rates for years now. I have a hard time seeing lots of people being motivated to sell a primary residence with rates rising like they are.

Death, divorce, and other major life events don’t wait for opportune market conditions.

But that was true before the rate hikes and yet the Fed still wasn't happy with the housing supply. There aren't more people dying and going through a divorce now that we've gotten the .75% hike.

A quick google will give you an idea of why people decide to sell their houses. It's generally got nothing to do with interest rates and everything to do with personal factors and a huge seasonality factor. People prefer to sell in the summer, and sellers make the worst returns in the winter months.

> and yet the Fed still wasn't happy with the housing supply.

Why would this be a Fed concern at all ?

At most they can affect the demand side

From the article:

"It's clear that Powell hopes the housing cooldown caused by rising mortgage rates will help to push inventory levels up. "

The Fed wants housing prices to fall and is hoping this will bolster housing supply in the short term since building inventory takes a lot of time.

Prop 13 has distorted housing market in Californian by fixing taxes; I could imagine extraordinarily low fixed rates would act similarly.

People might look at houses as homes instead of financial instruments. Wow.

If people lose their jobs or relied on margin to pay for their needs, they will absolutely sell their primary residence. Especially if you have zero cushion to weather any shock event.

It makes sense from an inflation-fighting standpoint to focus on home prices, which have been inflating faster than consumer prices as a whole.

It seems inflating housing prices are tied to some of the worst societal outcomes in the modern era, too. i.e. The Great Depression and Great Recession were both real estate devaluation driven. I also wonder about investor owned homes not being as beneficial to localities as householders. Out of area investors don't shop at local stores, pay local taxes to support local governments/projects, etc. That stuff matters. Look at how fast Detroit deteriorated without people living in the neighborhoods to keep things up.

Given the whole “we need to build more houses” angle would help “reset” housing, won’t increasing interest rates and rising inflation discourage construction?

That stands to reason. On the other hand, maybe demand for housing is not the bottleneck preventing construction, so demand can be lowered without expecting a commensurate loss of supply.

They overshoot it every time and instead of high housing prices we’ll have a recession. Layoffs and high interest rates. Can’t win either way.

They don’t overshot, they react too slowly.

Instead of cooling down an overheated economy, they wait for the bad effects to start before they do anything.

This is probably political. That way they can blame the bad effects instead of being seen as the cause.

I think it's just the economy is pretty large, and large things don't turn on a dime. Additionally, they're also sort of steering blind, as no one can predict future markets with perfect accuracy, and must rely on lagging indicators for direction. In other words, they know they need to turn around the ship, but it's slow to turn, and they don't know how much force they need exactly to get it to turn. They know that if they turn too fast, the ship can capsize, and if they turn too much they will overshoot. So slow and steady is the way they decide to go. Unfortunately, they tend to overshoot anyhow, as again, they rely on lagging indicators for direction.

right I mean they overshoot everything, they wait too long on inflation, they take too long to bring rates back down after a hike... it takes years to recover

Recession is a feature, not a bug

Yeah but they take too long to adjust and recovery drags on for years

There has been supply restrictions caused by older folks not selling and moving to assisted living due to COVID risk and increasing value. Now it's clear value is declining I expect a large chunk of folk who were holding off will sell.

Financial policy isn't going to solve the root problem: housing construction fell off a cliff after the 2008 housing crises. We have a supply problem. that's true for many areas in the economy, not just housing. Yet all the Fed can think to do is raise rates. All that's going to accomplish at the moment is transferring more wealth from the poor and middle class to the wealthy. Then again I'm becoming so jaded maybe that's all it was ever intended to do? Maybe they were just looking for a veneer of plausibility to justify the theft?

Recall that around a third of housing is purchased by major Wall Street investors (there's a Washington Post article that describes it). I wonder how this will affect them? Will they bail out? Will they hold on through the dip? Will they purchase even more - do interest rates affect their purchasing, or are they self-financing?

My wife and I are currently shopping for a home in Chicago. Is it a stupid idea to buy a house in the next few weeks?

Yes

Well rates are only going to increase from here it seems, which increases the cost of borrowing. You could be waiting a year or more for rates to come back down. If you're in a solid financial position and you see something you really want, why not?

I guess it seems like the fed is actively trying to pop the housing bubble and drop prices. If that's the case then buying now seems like a bad idea and we should rent for a year first. But honestly we are moving to a new city and I told myself I was done renting and ready to buy. We are in a solid financial position to put a substantial amount down.

If you just moved to a new city would you benefit from waiting anyways? Do you know the neighborhoods you'd want to live in?

What if this is not a bubble?

You can't really time the market. So buy something you want at a price your comfortable with.

You’re a good example of how humans are not simple logical and rational decision makers. And also that houses are more than hedonic compositions of goods to be traded solely for investment.

Yeah, I worked with a realtor once that kept referring to houses as "the product" as though it was some profound philosophical insight. I wanted to punch him in the face.

I don't think Powell's words mean he is trying to pop a bubble, just to slow down price increases for a while to bring prices in line with historical norms.

"to bring prices in line with historical norms."

How can you determine if that is the correct/desired course of action?

They publicly state their desired course of action each year. They've historically held an economic policy of maintaining perpetual ~2% inflation over long periods of time. Inflation is higher than that now, so they're trying to bring it back down. For more details see:

https://www.federalreserve.gov/monetarypolicy/monetary-polic...

https://www.federalreserve.gov/newsevents/pressreleases/mone...

Ask any financial professional and they'll tell you if you're trying to buy a house you really want, they'd say not to wait. It's hard enough to find a home you really want and you can't predict future conditions. You might not "get a good deal" but you'll have your dream home. If you were just flipping houses then waiting is the right move.

It's very hard to time any market, and particularly with a primary residence, most folks plan to stay in them for at least 3 years. It's entirely possible that you overpay today but if you make a smart purchase that you like, there's a pretty good chance your home value recovers in the long run.

I think the bubble talk is slightly overstated due to the increase in remote workers. That demand isn't going anywhere soon, which means prices aren't likely to come down much. The Fed is really trying to price out AirBnb and institutional investors, which only account for a small percentage of the market anyway.

I want to say yes, but I've always been warned against trying to time the market.

It is probably the worst time to buy a house in US history:

https://www.longtermtrends.net/home-price-median-annual-inco...

That really makes the point starkly. It also makes me wonder how much of the current housing valuations are tied to investors being in the market. I wonder what would push those investors to sell their holdings, too. (I imagine the routine maintenance is probably handled well in the short term, but maybe becomes determinative in the long term?)

Investors, presumably, would slowly and strategically sell off assets in their portfolio to minimize their losses.

I had a front row seat to this in 2010, during my stint as a creditor's rights attorney.

It was this odd tango of homeowners who would strategically default, and creditors dragging their feet throughout the foreclosure process.

It was implied that as long as the property was sufficiently maintained, the creditors would waive the deficiency judgement when they decided to foreclose. They would try to limit the number of foreclosures in a neighborhood or zip code to prevent saturating a given areas market.

Kind of a brilliant win win. No cost living for up to 3 years for being a good caretaker. That's the only bright side to it. It was savage and emotionally taxing, I'm glad to be a debt now.

The question is answered in specific, not in general. Is the rate you are offered good enough to offset the potential decline in equity? Remember that if the house loses 10% of its value, your downpayment does not somehow appreciate - essentially every month you pay some portion of each payment for equity that only the bank has / you cannot recover.

That said, if the rate is attractive and you have a long time horizon which you can predict reliably, then you might still find the rate attractive. if you plan to sell over the next 5 years though, it may be better to rent and negotiate lower rents if housing prices fall.

Alternatively, if you have a specific use for a house that requires you to own, consider whether that use is worth a premium of homeownership. (e.g. you have a woodworking business and need space that is hard to rent, or you have kids that need to go to a specific school district)

Timing the market is a bad idea, having contingencies for the eventuality that your timing was wrong is a good idea. so, build the cost of the contingencies into your model.

Finally, don't get into a false dichotomy of rent vs buy. it is better to think about the total sum on the table for either option and how you'd like to allocate it. e.g. you could just buy a smaller house, or rent a bigger one. Or, rent as cheaply as possible and buy gold, or bootstrap a small business. remember to enumerate all possible capital allocations before getting trapped in the choice between just rent vs buy.

Nobody knows. The future could bring anything. Maybe rates will go up for 10 years, maybe this is a blip and next year they will be down. Maybe housing prices will go up, maybe they will go down, maybe they will stay the same.

You asked about Chicago - the city as a whole doesn't have the outrageous prices of California, and so might do something different from the national average. Within the cities some areas have better prices than others. Different areas of the city will see different results. This applies in California as well - location matters.

You have to live someplace. What will rent cost if you don't buy now. I lost money on my first house (moved at the bottom of the 2008 downturn), but after accounting for all the rent I would have had to pay instead of the house I was still better off financially.

Make your best guess based on the above. You will be wrong in at least minor details, but hopefully close enough. In the worst case you just have to accept you made the best decision you could at the time, and there was no way to know it would turn out bad.

I don't think anyone can answer this for you considering you have to live somewhere.

Don't forget though that real estate is an inflation hedge so even if the market cools it is hard to see it falling off a cliff.

Home prices are likely to go down over the course of the summer in the US, driven by the increasing costs of financing. But macro factors (demographics driving up demand for a limited and slow to expand housing supply) are still present so the price relief could be short lived. Or we could enter a recession that drives home prices down to historic lows, nobody knows.

Mortgage rates are likely to stay elevated for a year minimum, so that’s just reality if you need a place to live in the meantime. Paying the extra monthly cost until rates drop and you can refinance probably still beats renting for that time.

If you are planning to own it for a long time then you’ll be fine. It’s only stupid if you buy and then sell it when the price went down, but the price will generally trend up year over year and you’ll come out ahead (though some say you never come out ahead owning a house).

If you can afford the house you are buying and like the house then it's worth it. If rates drop in 6 months you can always refinance, if prices fall you still have a house.

> Here's what Powell had to say: "We saw [home] prices moving up very very strongly for the last couple of years. So that changes now. And rates have moved up. We are well aware that mortgage rates have moved up a lot. And you are seeing a changing housing market. We are watching it to see what will happen. How much will it really affect residential investment? Not really sure. How much will it affect housing prices? Not really sure. Obviously, we are watching that quite carefully…It’s a very tight market. So prices might keep going up for a while, even in a world where rates are up. So it’s a complicated situation and we watch it very carefully. I'd say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again."

That word "reset" is ominous and should be taken very seriously.

People think that we're due for a correction in house prices so that first time buyers can get a chance to enter. That's not how housing bubbles end. They end with lower house prices, but such a crippled economy that few can or want to buy them out of fear of future declines/job losses, and severely restricted lending standards.

The idea that the Fed controls any of this is ridiculous. The arrogance of this institution is astounding. It's not a central bank. It doesn't control money, but rather a utility token called "bank reserves." It doesn't open and close valves on the monetary steam engine. It doesn't even know where those valves are located or their operating range because for decades the eurodollar system has allowed financial institutions to route around the Fed.

How long until the Fed drops interest rates again? Probably not that far off.

The Fed helped create it via QE, and then convincing the market inflation was transitory, which kept rates suppressed below fundamentals for 2 years.

The arrogance was intervening as much as they did in the first place, creating a massive bubble.

Even if inflation subsides, they will likely sell MBS to keep mortgage rates high until housing cools off. Home prices are already far higher than the 2000s peak in inflation adjusted terms

> The idea that the Fed controls any of this is ridiculous... It's not a central bank.

It is very literally the central bank [0] [1] and lender of last resort [2] of the United States. I'm not sure what you're saying.

[0] https://www.federalreserve.gov/aboutthefed/the-fed-explained...

[1] https://en.wikipedia.org/wiki/Federal_Reserve

[2] https://www.investopedia.com/terms/l/lenderoflastresort.asp

https://www.longtermtrends.net/home-price-median-annual-inco...

at sufficiently advanced levels, incompetence is indistinguishable from malice and should be treated as such

1. Print money indiscriminately, long after the economy has recovered.

2. Institute a forced lockdown on the global economy without sufficient evidence or understanding of the looming disaster

3. Print even more indiscriminately and hand out "loans" to practically anyone wtih any kind of business

4. Insist that inflation is transitory

5. Say you're going to raise rates. But don't raise them high or fast enough, allowing inflation to creep up.

6. Panic.

Unreal incompetence. A bunch of suites in a boardroom shouldn't have that much power over the global economy.

Hoping to buy next year, I'll take the higher rates and lower price with the intent of overpaying on my primary residence anyway. Although if everyone else is thinking the same way w.r.t waiting I'm not sure it'll end up any better.

Wouldn’t prices have to fall very very significantly for this to make sense? Let’s say you can afford a $700k house at 3%. The principle on that with 20% down is about $2,360 per month. At 6% interest you’d be at $3,360. To have a similar payment of $2,360, that $700k would have to fall to $490,000. I can say with complete confidence that $700k houses are not going anywhere near $490k. Higher interest rates are not the answer.

$700k luxury items can easily drop by $200k.

A house isn’t a luxury item for most, and a $700k house is fairly modest in most US cities, if not down right basic.

$700k is a nice house in most US cities. The median price is around $400k.

The median home isn't in a city is it?

This doesn’t really mean anything. Look at what $700k (not list price, sale price) gets you in Seattle, Portland, The Bay, LA, or Denver. It’s not much.

> Home prices can fall, however, but for it to happen inventory will likely need to rise much higher. Once U.S. inventory levels climb above 2 million units, Mohtashami says, home prices could begin to fall nationally on a year-over-year basis.

The US needs to be building millions of houses every year from here on out, but NIMBYs won't let one be built!

It's not zoning, there's plenty of space that's permissibly zoned. The way credit works heavily discourages people from building houses and only lets them buy housing that's already built.

EDIT: Yes the way things are is a symptom of this. Pointing out that individuals don't get loans to build houses only proves my point.

Only a tiny minority of new houses are self-builds - most are built by developers and sold as normal with mortgages.

Normal ain't working.

But that’s got nothing to do with credit.

Which is the outcome of potential self-builders not usually being able to secure the funding necessary.

Self-building is a lifestyle thing - vast majority of people don't have the time, effort, skill, or inclination to take on a project like that.

What effort is required? You go down to the model home centre, pick a style you like, tell them where your vacant property is located, and hand them the money. The last bit is the only hard part. Give them some time to build the house. Done. Your involvement is required to a minimal extent, but that is also true when buying a used home.

If this were settler times then you would have to do everything, perhaps, but in this advanced economy others will happily do the work for you in exchange for money. You can increase your involvement, trading time for money, as much as you wish but it isn't strictly necessary.

Don't you have to find contractors, deal with unexpected situations in the ground, things like that? I only know a few people who built them own homes and it was a monumental effort for all kinds of corner-case issues.

It really depends on how much you are willing to spend. The more you take on yourself, the more money you can keep for yourself. Time is money, after all. In my anecdotal experience, it does seem that things like finding contractors is a place many are willing to put in the time to save some cash. However, there are businesses who are full service providers for those who want to be as hands off as possible. You will pay for that service, of course. And, indeed, to bring this full circle, if you are already struggling to obtain the necessary credit you might not be able to afford such services.

> It's not zoning, there's plenty of space that's permissibly zoned.

Yes but it seems to me that regulation and zoning disproportionately prevent building in desirable areas.

> The way credit works heavily discourages people from building houses and only lets them buy housing that's already built.

Interesting, would you care to explain further?

It's a complicated process that is nearly impossible for unsophisticated home buyers to qualify for or navigate.

I don’t think we should be building more SFH in BFE. We need to be building more high density in our cities. That would actually alleviate the pressure and increase quality of life while lowering tax burden for everyone.

We need to be building more housing in general. The low density housing in cities is certainly an issue for cities but not everyone lives in (or wants to live in) cities. At the end of the day a housing unit is a housing unit and if you make SFH cheaper then people who don't really want MFH but only live there because it's cheap will move.

I disagree. The issue isn't housing availability in BFE - the issue is housing availability in major cities. The reason SF is so expensive is because in spite of all the SFH being built outside of SF - it still isn't enough to compensate for the demand required IN the city. This causes run off effects in other cities/regions. If you built enough housing - people wouldn't do super commutes and ruin your idealistic small town vibes.

The reason the peninsula is so expensive as well is because there's very little housing compared to the demand. If we built nice high density housing and got rid of crappy tax-inefficient suburbs then we could have lower cost of housing for everyone (including SFH).

Isn't Biden's real estate affordability plan supposed to incentivize local governments loosening zoning and other restrictions? Anyone with any insight care to comment on the prospects of that plan working?

All that printed money has to go somewhere though.

So if it is taken out of housing, then either it will go to commodities, stocks or crypto.

I got a feeling that rich people will keep investing on land, so I don’t think a housing market crash will happen but prices might drop a bit.

No, money is created and destroyed all the time.

> that printed money has to go somewhere

Money isn’t conserved in our system. When the Fed sells a bond, and it’s presently selling tens of billions, scheduled to increase to hundreds of billions, it destroys that money.

Won't less money will be 'printed' (i.e. created by banks via lending) as mortgages fall?

Yes and all those existing mortgages have to be paid off which reduces the money supply. You actually have a system that ratchets itself back the moment people stop borrowing. The problem is that debt deflation causes the velocity of money to drop making it harder to pay off debt.

The central bank is perpetually scared of debt deflation so it targets a 2% inflation rate. If you could implement a -2% negative interest rate you wouldn't need inflation targeting at all. Debt deflation wouldn't result in a stagnant economy with unemployment making it easier for governments run a balanced budget or short term austerity without ill sideffects.

Fucking bastards. Home prices aren’t going to fall because there simply isn’t enough housing for everyone. There’s a housing shortage, we need to build more houses, that’s how you make prices fall.

Meanwhile, since home prices aren’t going to fall, mortgage rates are going up, so now it becomes prohibitively expensive to even get a mortgage.

I've been hearing this for years and yet houses have already fallen 20+% in the Toronto area since the Canadian government started increasing rates. Maybe it's not just lack of supply? Maybe speculation and cheap credit has created demand for houses as investment vehicles people aren't actually occupying?

You can make home prices fall, by creating a shortage of dollars/credit that's worse than the shortage of houses. For hyperbole, houses wouldn't trade for hundreds of thousands of dollars, if there were only 1k dollars total in existence. A housing shortage wouldn't change that. Fed is currently removing dollars from circulation by reducing their balance sheet, and removing available credit by raising interest rates. Eventually this will weigh on houses prices (along with many things).

There is enough housing for everyone. Many houses have more bedrooms than people and most bedrooms could hold more people than they currently hold. The supply is more elastic than you would expect just looking at number of houses vs. number of people.

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