it's SQUARE FOOTAGES FAULT!!!
or... also possibly
The single biggest driver of increased housing costs is a severe, systemic supply-and-demand imbalance caused by a long-term shortage of new home construction. [1, 2, 3]
While record median home prices—like the $429,300 peak recorded for existing homes—are influenced by several overlapping factors, the roots of the crisis trace back to these primary drivers: [1, 2, 3]
Underbuilding & Inventory Shortages: The U.S. faces a structural shortage of about 1.5 million housing units. Between 1995 and 2020, the U.S. was the only major developed country where the housing supply grew slower than the population. [1, 2]
Restrictive Zoning Laws: Strict local zoning regulations, land-use policies, density limitations, and environmental review processes frequently make it economically unfeasible or illegal to build high-density, affordable housing (like apartments or duplexes). [1, 2]
Surging Household Formation: Household sizes are shrinking, resulting in a significantly larger number of households needing to be housed, which outpaces the rate at which new units are built. [1, 2]
High Mortgage Rates & "Lock-in" Effect: Elevated borrowing costs and inflation-driven interest rates (with 30-year fixed rates hovering around 6.67%) have artificially constrained supply. Homeowners who secured sub-3% rates during the pandemic are refusing to sell, causing a severe drop in the "existing home" inventory. [1, 2, 3, 4]
Construction & Labor Costs: The cost to build has skyrocketed due to higher raw material prices, regulatory compliance costs, and skilled labor shortages. [1, 2, 3, 4, 5]
Investor Demand: The financialization of real estate and institutional purchasing have converted substantial chunks of traditional housing stock into corporate rental properties or short-term rentals.
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Crnr2Crnr ·
