Thank you for mentioning interest rates. Any time housing comes up on HN, the main factors people bring up are short-term rentals, NIMBYism, and lack of new development. However, if these explanations had any merit, why have home values in Flint, MI increased by 67% since March of 2020?

Flint's population has rapidly declined over the past 40 years and continues to decline (its population is less than half of what it was at its peak), so there's not a population boom driving up demand. Flint is not exactly known as a tourist destination either. And to top off, Flint is most well known for its contaminated drinking water that contains lead. So why on Earth would such a place be experiencing a housing shortage?

The obvious answer is that governments around the world have brought interests rate down to zero, which forces investors to seek out riskier and riskier assets to invest in. Instead of investing in traditionally safe assets like treasuries and bonds, investors now have no choice but to invest in stuff like tech startups, cryptocurrencies, personal loans, mortgage-backed securities, and dilapidated houses in the Midwest.

And the biggest reason people buy housing is that its been the best investment. The wealthiest people I know are the people that bought houses a long time back and kept leveraging up into buying more.

That's the path I'm on right now, not because I love being a landlord, but simply because it's the best investment available.

And that's exactly why are houses so damn expensive all over the world. Boom

Equities have a higher return historically. Housing is interesting though because mortgages offer huge leverage to retail investors.

> Equities have a higher return historically

Maybe in the USA. In other countries real equity returns have been negative for decades.

Housing only started beating inflation sometime in the late 90s.

The interest is the cause of the problem in the first place. We've known for thousands of years that usury is bad, it's prohibited in the three major religions, and for good reason.

We see it time and time again. Policy makers try to address the symptom but not the cause, then people cry when nothing gets fixed.

You might be right. I assume lending as a regular part of the economy but my grandparents lived in a world where it was very difficult, even for a mortgage. I can't see any real benefit of credit cards, payday lenders.

But if it's a global problem... where are all these rich people coming from? Even if the richest 10% of the global population were going around buying three houses a piece, that would still leave 70% of the housing market left over for us plebs.

Its not rich people its middle class people with 500k mortgages that no one would take if rates were 5%. US rates have come back up, Europe is slowly started too but full impact isn't yet felt.

https://www.euribor-rates.eu/en/current-euribor-rates/4/euri...