3 Ways To Ensure Home Prices Continue To Soar (And To Make Sure Your Kids Can’t Afford Homes)

The annual income necessary to buy an average home in the U.S. is now at an all-time record high ($124,200), per .

The reasons are obvious: rates climbed 4% over the last few years, and the median home price has surged from about $266,000 pre-COVID to about $400,000 (per NAR).

Here are three ways to ensure home prices continue to soar no matter what happens in the economy:

1. Severely Restrict Supply!

Nobody does this better than California, with massive permitting costs and delays, significant taxes and government-imposed soft costs (environmental impact fees anyone?), solar and other builder mandates, and extraordinary building and zoning restrictions. There are 100,000 acres of permanent, gorgeous, untouched, pristine open space near my CA home, and I love it! But, man, does it make housing more expensive for my kids!

2. Print Money Via Deficit Spending.

This works every time! Hard assets (like houses) go up in value in conjunction with the increase in the money supply. If your house is worth $100,000 and the money supply doubles, you should not be surprised to see your house double in “nominal value” too to $200,000. You are not wealthier at all, as you can’t buy more goods and services, but you can brag that your house doubled in value. You can also sneer at poor people who don’t own stocks and houses, as they will simply be struggling to pay the higher prices that come with that inflation — without enjoying asset appreciation.

3. Subsidize Housing.

Governments can subsidize housing to make it more affordable in the short term via artificially low interest rates, down payment assistance programs, housing grants, and government-sponsored loan programs that would not otherwise be offered by the market (e.g., private lenders) because the loans would be deemed too risky. These loans include FHA, VA, and USDA loans, along with most everything Fannie and Freddie offer with less than 10% down.

We love these loans; we’re experts when it comes to all of their nuances; and we make a ton of money from them.

But let’s make no mistake here — every government subsidy intended to make housing more affordable always has the effect of increasing prices to the point where the affordability help is eventually offset by the price increases.

So, yes, every time we see a new program that enables today’s crop of homebuyers to get better financing, you better believe we’ll be all over it!

But we also know that the program and every other program like it will just make the cost of housing that much higher for tomorrow’s crop of homebuyers.

We watched home prices surge in the early 2000s solely in response to “affordable housing” initiatives that only made housing much less affordable.

We also watched housing prices surge 50% since the pre-COVID days, and if you want to know why — see above.

It’s not greedy builders, sellers, or anyone else. It’s government distortions.

Originally published at on March 20, 2025.