IMHO the inflation of housing costs has many factors, but one of the ones that gets overlooked is the concentration of wealth near the top. Rich people need safe places to stash their money, and they end up buying real estate all over the country. This isn't just Americans either, US real estate is a popular investment all over the world. But when you are buying real estate as an investment where do you buy, not out in some no-name town in some flyover state. You buy in a place where the market is already hot and ride the wave. Thousands of millionaire investors piling into a market end up pricing out regular folks who just want a place to live.
I'm frankly surprised that we have not seen more real estate bubbles pop over the years. It's clearly unsustainable, yet somehow the market keeps going. Ask your parents if they could afford to buy their home today, even with their best yearly income. Most of them will say no if they lived in the city for a couple of decades or more. I know so many who bought their house for $70k-$100k in the 70s and now see their neighbors sell for $1m-$1.5m. It's insane.
I'm frankly surprised that we have not seen more real estate bubbles pop over the years. It's clearly unsustainable, yet somehow the market keeps going. Ask your parents if they could afford to buy their home today, even with their best yearly income. Most of them will say no if they lived in the city for a couple of decades or more. I know so many who bought their house for $70k-$100k in the 70s and now see their neighbors sell for $1m-$1.5m. It's insane.