Massive housing price inflation relative to median incomes, for one, which the popularity of real estate and rental property ownership as an investment/speculation tool has greatly contributed to.
I'd argue it's the lending market and tax incentives, not the housing market.
The lending market is designed to encourage spending and making higher offers. It brings new people into the housing market faster than they should be entering.
The tax breaks around owning a home encourage you to live there for 3 out of the last five years. There are also realtor fees that discourage you from selling. This, along with housing values appreciating discourages people from selling. When my home is appreciating in value, it makes it more attractive to buy as an investment or rent it out while I buy a new house.
If you encourage people to buy and discourage them from selling, you're going to get a high demand / low supply situation pretty quickly.
If you eliminate the tax breaks and reduce lending, you'd have a pretty balanced market.
But who wants to be the politician responsible for slowing home value appreciation?
everdev|7 years ago
The lending market is designed to encourage spending and making higher offers. It brings new people into the housing market faster than they should be entering.
The tax breaks around owning a home encourage you to live there for 3 out of the last five years. There are also realtor fees that discourage you from selling. This, along with housing values appreciating discourages people from selling. When my home is appreciating in value, it makes it more attractive to buy as an investment or rent it out while I buy a new house.
If you encourage people to buy and discourage them from selling, you're going to get a high demand / low supply situation pretty quickly.
If you eliminate the tax breaks and reduce lending, you'd have a pretty balanced market.
But who wants to be the politician responsible for slowing home value appreciation?