There is more to high house prices than constrained supply

Eh, the full picture is more complicated for college tuition prices. While loan availability may drive up tuition somewhat, there has been a drastic decrease in state funding to higher education over the last few decades. In New Jersey, one of the worst offenders, the state funds less per student than 20 years ago, and that is before inflation. This has driven an increase in bonds used to support things like capital expenses and even basic infrastructure maintenance, and the interest on those bonds has driven up operating expenses.

Another factor is a sort of raise to the bottom arms race among colleges to attract students with shiny new facilities, causing even more debt.

> isn't enough to buy at all so you rent forever

And landlords are willing to get a mortgage that can be paid for by the rent (modulo speculation).

"you'll probably be working 8 hours a week" - what?

Years ago in the UK there was a considerable quantity of council owned properties, these were nice places to live with nice rents to pay. There was no shame in living in a council house, but you wouldn't be buying it, so it was not yours. You wouldn't be evicted either or forced to pay through the nose.

This worked as a baseline, if you had more money or wanted to live in a posh area (or just the countryside) then you could rent elsewhere. Or buy.

Councils could extend their stock of housing and there could be benefits of scale, e.g. replace everyone's windows for double glazed at the same time on the whole street.

In this market there was an anchor on house price inflation as well as market rents. Why pay double to live in somewhere not looked after just to line the pockets of a rent-seeker?

Then Margaret Thatcher came along. Nowadays we don't have council housing. There is some but none is available. Councils aren't allowed to build/buy more. With 'right to buy' the council housing was sold on to rent-seekers, none of whom have any interest at all in the community and only have an interest in making money, not housing people. The rent-seekers have portfolios as bit as large as councils used to have in some instances.

Social mobility is lost now that we have rent-seeker owned properties, you can't just move as easily as was possible with council owned housing. This has been great for the rent seekers as well as their banks. For people wanting to be part of the community, bring up a family and do legit work this has not been so good. Either you are a serf or a rent seeker. There was a time when it was not like that.

The red carpet has been rolled out all the way for the rent seekers, the silly interest rates and notionally low inflation (which does not include rent) means that their capital accumulates, they can leverage and steal more homes from people who deserve to be 'on the ladder'.

Normal working people are forced to pay ever higher sums of money to the rent seekers as they have no choice. So you have two people working to pay for a single bedroom flat, with no money to spare or kids or even cars. You would be really shocked if you saw how some people live in London, people that do service sector stuff have nothing. Pigeons fare better.

People nowadays have no knowledge of how well a stock of council houses serves the community, all they know is the world of the rent seeker. Politicians 'demand' more affordable housing but that doesn't fix the problem, you need capital to deteriorate if invested in property, an anchor in rent prices and for people to be able to live not speculate. It is not hard to get right and not mankind's hardest problem. Apart from anything else having property as the only asset that accumulates is wrong, people should be investing capital in business, old and startup, not forcing the next generation out of their homes.

The last bit is an analogy.

The idea that your payment is fixed and so the only thing that varies is the proportion allocated to different external parties makes no sense, because you're not buying the same thing.

People don't look at a house and say "I want that" and buy it. They look within their maximum payment range. What exists within that range is hugely influenced by external factors.

The analogy with an 8h work week would be that everyone 'pays' 8 hours a day for their free time so every other factor is irrelevant. Of course it's not; the particular job you end up with for your 8 hours (influenced both by your personal skill but also the external market) has a massive impact on your QoL.

> If lenders are willing to finance an investment with 3% yield, then house prices will jump to 33x their annual rent value - it goes without saying that's only possible in low interest markets.

There's truth to this, but I don't think house prices should simply be (annual rent) / interest_rate. There's a variety of other homeowner costs to consider (property taxes, HOA, maintenance, etc.) and buyers are taking an opportunity cost not being able to invest their paid-down principal (including down payment) in riskier assets.

I have a calculator at https://medium.com/@usaar33/an-up-to-date-buy-or-rent-calcul... to find indifference point on the buyer side. Other huge inputs are future appreciation rates of investment and property. At default values, price moves at about half that of mortgage rate changes: e.g. halving the mortgage rate only raises the house price willing to pay by ~16%; doubling it, cuts price by ~25%.