This sounds cruel but it is the only counterweight to runaway housing costs, if we are going to live in a world where housing is an investment and we restrict new supply severely.
And "free in most of the world" dramatically oversimplifies an entire spectrum of healthcare funding models.
Have you met people?
I’m not saying this is a good thing, but we can’t just wave a wand and make housing-as-investment go away without creating real hardship for people (whose lives we are trying to improve with these measures, running counter to the goal).
Even homesteading a log cabin on free land or building a mud hut is an investment. Houses take significant labor and materials to construct and there is no way around this. Add and land which can either be created nor destroyed and this only becomes more obvious.
Housing is an investment because it represents significant input in material and labor which only returns ulity slowly over time. It doesnt matter if are living in a commune, capitalist society, or alone. That only changes who invests in it.
That causes a boom and bust in housing production and turns housing into an investment - like the classic car market.
We saw a similar effect during the pandemic when the used car market became like the classic car market due to lack of supply.
The solution was to get back to producing more cars. Same with housing.
Price level (the Fed targets PCE not CPI, but that’s tangential; they are both price level measures) going down is deflation, which the Fed wants to avoid much more than inflation.
The Fed doesn’t really want the CPI to go down at all (significantly anyway) just to stop going up.
It doesn’t even want it to stop going up, just to moderate the rate of increase to around 2% annually.