Economics Explained A Short Story About Why You Cannot Buy A House
Dec 2, 2025
Home ownership is increasingly out of reach in major cities, with housing prices reaching astronomical multiples of average income. Essential workers are being pushed out, raising urgent questions about housing as an investment rather than a necessity. Factors like zoning regulations, low interest rates, and pandemic disruptions have exacerbated the crisis. Existing subsidies are failing to help, inflating demand without addressing supply. The discussion includes potential global policy solutions to tackle this pressing issue.
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Global Home Ownership Is Breaking
- Home ownership has become globally unaffordable, with median prices rising far above incomes in major cities.
- This shift turns homes into investment assets and squeezes middle-income households out of cities.
Median Multiple Reveals New Reality
- The Demographia 'median multiple' now shows no affordable markets among 95 cities, with many in 'impossibly unaffordable' territory.
- Cities like Hong Kong and Sydney now cost over ten times median incomes, marking unprecedented unaffordability.
Housing Became A Preferred Asset
- Housing shifted from shelter to a prime asset as wealthy actors sought safe asset parking and steady returns.
- This surge in capital collided with constrained supply, amplifying price increases.