‘Incredible wealth transfer’
The surge in U.S. home prices has been nothing short of alarming. Over the past five years, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index has climbed by over 50%.
This sharp rise in home prices creates significant challenges for prospective buyers, but renters aren’t immune to the impact either. It’s all part of the broader cost-of-living crisis gripping many Americans.
Thiel broke it down, stating, “There's a way you could talk about inflation in terms of the prices of eggs or groceries, but that's not that big a cost item, even for lower middle class people. The really big cost item is the rent.”
At its core, Thiel argued, the issue boils down to supply and demand.
“If you just add more people to the mix, and you're not allowed to build new houses because of zoning laws, where it's too expensive, where it's too regulated and restricted, then the prices go up a lot,” he said. “And it's this incredible wealth transfer from the young and the lower middle class to the upper middle class and the landlords and the old.”
Thiel isn’t the only one raising the alarm. Federal Reserve Chairman Jerome Powell has highlighted similar concerns.
“The real issue with housing is that we have had, and are on track to continue to have, not enough housing… It’s hard to find — to zone lots that are in places where people want to live… Where are we going to get the supply?” Powell said at a press conference in September.
The gap in the housing market is significant. A June Zillow analysis estimated the U.S. housing shortage to be 4.5 million homes as of 2022.
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Learn More‘Get on the housing ladder’
Beyond soaring home prices, elevated mortgage rates are another major obstacle preventing many Americans from “getting on the housing ladder,” as Thiel described.
The good news? The U.S. Federal Reserve has been cutting interest rates, providing opportunities for potential buyers. Freddie Mac recommends shopping around by obtaining quotes from three to five lenders to secure the best mortgage rate possible.
To make this process easier, tools like the Mortgage Research Center (MRC) can help you quickly compare rates and estimated monthly payments from multiple vetted lenders. By entering basic details — such as your zip code, property type, price range and annual income — you can view mortgage offers tailored to your needs and shop with confidence.
Also, these days, you don’t need to buy a house to start investing in real estate. Crowdfunding platforms like Arrived have made it easier for average Americans to invest in rental properties without the need for a hefty down payment or the burden of property management.
With Arrived, you can invest in shares of rental homes without worrying about mowing lawns, fixing leaky faucets or handling difficult tenants. The process is simple: browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you’d like to purchase, and then sit back as you start receiving rental income deposits from your investment.
Another option is First National Realty Partners (FNRP), which targets necessity-based commercial real estate.
With a $50,000 minimum investment, the platform lets accredited investors own a share of high-quality properties leased by national brands like Whole Foods, CVS, Kroger and Walmart. Investors can enjoy the potential to collect stable, grocery store-anchored income every quarter.
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