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Comment by stocksinsmocks | Hacker News Reader

The tariffs are a bit of a new phenomenon so I think that may be motivated reasoning. Construction productivity has also been stagnant for about 60 years. I think the most important factor is that housing prices, in the United States at least, are governed by how much a bank will lend. Very small but affordable houses will never be built because a bank will not finance a $10,000 loan over 30 years. In the same vein, it’s technically feasible for automobiles to be built for just a few thousand dollars, but, again, they will not finance $2500 over five years. So cars and houses are just built to the price point which will satisfy the lenders. You may not hate financialization nearly as much as it deserves.

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> The tariffs are a bit of a new phenomenon so I think that may be motivated reasoning. Construction productivity has also been stagnant for about 60 years.

If construction was stagnant for 60 years, adding 10-50% tariffs on lumber and building materials would only make it worse. Not motivated reasoning, just basic economics.

The new tariffs went into effect January 1st, by the way. If you thought things were bad now, they're about to get worse.

This announcement is just another distraction. They want you mad at Wall St, not tariffs.

> In the same vein, it’s technically feasible for automobiles to be built for just a few thousand dollars,

No it's not.

If this was true you'd see it in some other countries. It's not happening anywhere in the world. Unless you redefine automobile to mean a tiny cart with a 5HP motor and some seats.

> If this was true you'd see it in some other countries

The closest thing you have are Japanese Kei cars - you can get a brand-new Suzuki Alto for $6,600 before sales tax, but it would not pass crash US safety standards, it's built for slow city streets of Japan and not highway driving.

The claim they went into effect January 1 simply does not seem true.

The finished products tariff was delayed: https://edition.cnn.com/2026/01/01/business/trump-furniture-... For unfinished lumber, I don't think there was any tariff going into effect January 1.

Sure, these tariffs may further increase the house of prices (e.g. be relevant to 15% of the cost of the house, with tariffs ranging from 20% to 50% and sources of materials adjusting to these tariffs), but the say 4% future effect of these tariffs is likely less than the effect of zoning laws, other development restrictions, and rent freezing.

> governed by how much a bank will lend [...] Very small but affordable houses will never be built because a bank will not finance a $10,000 loan over 30 years.

Banks typically won't hold onto to your loan for 30 years. Mortgages in the US have been thoroughly fiscalized: your typical bank/mortgage lender bundles up a bunch of loans and sells them to another servicing party as soon as the ink dries on the closing documents. The specialized servicer package them, and offer them as securities to investors who in turn will get a monthly return based on aggregate mortgage installments.

All this to say: lending banks would be happy to finance thousands upon thousands of 5-digit mortgages, and sell those to securitization specialists.

New houses aren't built in existing neighborhoods because dense housing is unpopular, as is a distaste of having "poorer" people as neighbors. Static zoning, terrible transport networks and no funding for new public infrastructure tag-team to discourage new developments on undeveloped farmland.

Not sure about $10,000 houses (that would be pretty spartan, even Tiny Homes usually cost more than that), but the $2500 car thing being due to lenders is completely off base. The reason there are no $2500 cars is that it's impossible to make one and meet current US safety regulations. Once you meet all of those, then you're already well beyond $2500, but it's still a pretty crappy car. Might as well add a few extra creature comforts that most consumers demand (power locks, power windows, bluetooth/stereo, disc brakes, more than 100HP engine, etc.) and you're never going to be below ~$15K with current parts and labor pricing.

$2,500 cars? $10,000 houses? I found the time traveler from 1960!

Source that cars are buildable for a few thousand dollars to the existing laws?

Even the Slate truck is $25,000 because safety features are required.

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