The Strong Towns Podcast The Housing Market Can’t Tolerate Lower Prices. Now What?
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Aug 4, 2025 The discussion tackles the myth that building more houses automatically lowers prices. It delves into the housing market’s complexities, revealing how falling prices threaten builder confidence. Historical patterns reveal how financial innovations often inflate prices instead of fostering affordability. Local solutions, especially for starter homes, are highlighted as vital for real change. The podcast encourages grassroots movements to create sustainable, community-driven approaches towards affordable housing.
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Building More Won't Lower Prices
- The belief that building more housing automatically lowers prices ignores realities of financial markets.
- Falling prices cause builders and lenders to pull back, limiting new supply contrary to simple supply-demand theory.
Housing Finance Demands Rising Prices
- Housing finance is dominated by financial interests focused on price appreciation, not affordability.
- When prices drop, it signals risk to lenders, causing a contraction in housing supply.
Builder Pullback Example: KB Homes
- KB Homes canceled 9,700 lot options due to market softening.
- They pulled back construction as they couldn't meet expected profit margins.
