Different kinds of 'investment'. You're correct that if they can't turn a profit, they won't build. Same as with cars or bicycles or any other good. But that's not a long term thing - they want to sell the goods they have produced, turn their profit, and move on to the next project.

What people who buy homes are told, though, is to essentially 'buy and hold' because it's a "good investment" that will gain value over time, even if they are not building anything or adding any value to the dwelling they inhabit.

Where I live, during the recent runup in prices, the median home gained something like $100,000 of value in a year, which is significantly more than the median household income.

I'd say that most people do not buy a house for the investment. They actually live in it and any value appreciation is a side-effect. A pleasant one, but not the primary goal of the purchase.

Here's a chart of homeowner gains vs developer profits. It's a bit apples to oranges, but it gives you an idea of the scale of who benefits (at least on paper) from the housing crisis:

https://oregoneconomicanalysis.com/2021/03/16/who-benefits-f...

Ideally, I think, home prices would be fairly stable - neither appreciating a lot, nor dropping in value. Boring. That would also make them a 'bad' investment for corporations looking to make a buck by buying and holding.

> What people who buy homes are told, though, is to essentially 'buy and hold' because it's a "good investment" that will gain value over time, even if they are not building anything or adding any value to the dwelling they inhabit.

Do you expect people to buy and sell their home? It’s their home, why would selling (in the short term measured in decades) be the goal?

People primarily buy homes to live in. Any benefits of price appreciation, and/or political interests of those nearing their end of life and want to downsize/die are secondary.