Priced out of home ownership

I would be highly surprised if this were true. I lived in NYC for year and the myth of tons of empty units is pernicious and just won't die. There has been a TON of research on this topic and it all points to there being a huge shortage of housing in the city. As a percentage of total housing stock vacant units make up a fraction of a fraction of a percent.

Its really just building.

I grew up in a somewhat rural part of the US, basically just farm land and forests, but a few dozen miles from a city of ~100,000 people. The amount of NIMBYist "we gotta protect the farm" "we'd never sell to some big developer (spits on the ground)" you hear day to day was extreme, to say the least.

Ten years later, that city of 100,000 people is 115,000 people, a half-dozen miles closer to the rural farming community, and they just opened a strip mall outside of town. In another ten years they'll likely have a Starbucks and a luxury apartment complex. In thirty years that small community won't really exist; it'll be called an "exurb" of a city of 250,000 people.

My point in saying this in response to your comment is: Density brings money; and money trumps everything else. It trumps NIMBYism. It trumps Good Ole American Values. It can also trump inequality, weirdly enough; because density (aka money) increases the efficiency of our land use. The issue is: We aren't building enough.

> where will this end for a lot of investors

Constant-ish property asset values relative to baseline inflation. Its really not the end of the world. There's so many places to park money in the US economic system, its weird that we're so caught up in something so real and ugly as residential real estate. Go park your money in Nvidia.

Here's my take: the government should back low interest rate and high eligibility loans specifically for the purchase of housing which has never been lived in before. There should be some provision which allows the loans to be used in the case of initial development, or redevelopment if the new development has a higher density than the previous development on that lot (e.g. the lot had 1 unit before, now it has 4 units, you're good). These loans should be made available to individuals; two per person, some reasonable market-dependent limit per loan. That's it. If the specifics are correct, a program like this would fix an extreme number of problems the US housing system has. It would create a few problems, for sure, but critically: a program like this would create liquidity in the housing system, and its far, far easier to fix problems in a liquid system versus an illiquid one.

They do help though. Individuals need to realize they can’t afford to live in a place like California and have to give up that luxury if they want more affordable housing arrangements.

Note that Trump's tariffs on Canadian lumber increased the cost of new construction by 20% over a period of a few months (the article mentions the cost of materials, but not the root cause, which was this tariff, and some climate disasters, like when the Texas storms took out 20% of global PVC production for a year or so). Biden has been aggressively increasing tariffs, so they are both directly to blame.

The interest rate spike and high inflation were predicted by pretty much all economists when Trump decided to needlessly keep rates low during his first term, so blaming Biden never made much sense to me

Anyway, lots of studies have been done looking for root causes for homelessness and unaffordable housing. Every theory I've heard (drugs, mental health, nice weather for tent encampments, joblessness, etc, etc) has been shot down by such studies except the idea that if you have fewer houses per capita, then you will have more homeless people and more expensive houses.

Assuming global financial stuff changed radically but we didn't build more houses, where would these people with lots of money in the bank live, exactly? Also, wouldn't that cause the price of housing to increase (increased demand, constrained supply, and inflation from the increased money supply)?

The graph you cite says the US has 0.4 houses per person. That means that, on average, we don't have enough houses for people that are single, couples without a live-in kid, or single parents.

It goes on to say that 7% of US houses are vacant, but that wouldn't make up the gap. Also, many houses in the US are vacant because there are in places where the economy has dried up, and there aren't adequate utilities, schools, groceries, etc. Even if those houses were somehow renovated, many people would still be better off financially if they chose to live on the street instead of in those places.