Money printing and bad economic policy. The government has printed trillions of dollars and injected it into the housing market, via guaranteed loans and loans directly purchased. All this money pushed up prices beyond what new supply could absorb (it takes time to build housing).
We have a similar market failure with higher education: easy money makes for high prices.
But how does that explain a fundamental undersupply of houses? That is, I've read from lots of different sources that the primary issue is more people needing houses than there is supply. I get how all the stuff you've mentioned pushes up the price of houses, but shouldn't that also spur a ton more home building?
I guess a better way to frame my question is "Why has new home building been far below the actual need?"
Money printing and bad economic policy. The government has printed trillions of dollars and injected it into the housing market, via guaranteed loans and loans directly purchased. All this money pushed up prices beyond what new supply could absorb (it takes time to build housing).
We have a similar market failure with higher education: easy money makes for high prices.