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One thing I've noticed is that people I know have 2 problems.
they might not know what things should cost. If the prices rises, I notices it right away. I shop at the same grocer and know the standard price of everything I buy. I notice a price increase when I pull it off the shelf. Most my friends don't notice a price increase until they check out.
My friends that do notice a price increase never substitute or change their meals. They will still buy the same meals. Even if the stuff they need go on sale every other week. I've found that usually most my stuff I can still buy on sale at least 1 or 2 times per month.
These two problems mean that our generation doesn't really put much pressure on stores to keep prices low.
Rent: Housing costs in America are entire caused by a supply shortage due to limitations on supply. We can literally build as much housing as we want and set the market rate at anything, but since the 60s America hasn't built much and the little we have built has been expensive single family homes. This is a choice voters have made for 60 years, but voters can also make other choices.
I work for a huge bank that's investing a non-trivial amount of money (billions) in single family homes. They don't plan to rent them out. They just want to own them.
Now why would a huge, rich bank invest in something like that? Because they're pretty sure they're going beat inflation when they resell those properties later. It's a very safe (if spread across the entire US and Canada) place to park money.
It's not a big deal if one or two banks do this or even a handful of private equity firms. However, when all of them do it at once (like they are now) it can have a major impact on the prices of single family homes. It also creates something called a, "systemic risk" but that's a very large topic that I'm not going to cover here.
The point is that yes: The big banks and big private equity firms (and 401ks!) all own way too much non-commercial real estate in general right now and their expansion into single family homes is a great big societal problem.
...but why now‽ Why haven't they been investing in huge swaths of single family homes since forever? I mean, they've been appreciating faster than inflation since forever with only a few minor hiccups (e.g. 2008). The answer is: It used to be much more expensive to maintain homes that don't have anyone living in them.
Back in the day most homes were unique. In any given neighborhood some homes might have gas heat while others had electric and some others used oil or coal! There were also more fire and flood hazards with more flammable furnishings/building materials and things like washing machine hoses would often just break after a certain amount of time (the seals were only good for like ten years).
These days you have endless amounts of cookie cutter homes in enormous neighborhoods all over the damned place. They're also built to vastly superior building standards and come with appliances and AC that are orders of magnitude more efficient than in decades past.
This means a big bank or private equity firm can buy hundreds of houses in a region and (cheaply) hire a 3rd party to look after them. They just don't need as much maintenance as they used to. They're so much cheaper to maintain en mass.
So how do we fix this problem? There's all sorts of things you can do but some quick and perhaps unexpected things are:
Basically, you have to turn unoccupied homes into expenses again. When that happens the banks and private equity will get the hell out.
There's lots of private equity that will just convert to being slumlords but the big banks do not want to be renting out anything. It's a huge risk for them and looks real bad on their balance sheets from a banking perspective. Also, if a bank is big enough they're straight up forbidden (by law) from renting out properties (though there's various loopholes which I won't get into).
Progressively higher property tax for multiple homes seems like a good start.
You only have to look into this very thread to see even people screwed over by the housing market also don't want there to be more housing.
It's clear preventing housing from being built has become entrenched in Americans on the left and the right.
Again, there isn't some magical limit to the amount of housing we can build. If a big bank wants to keep lots of Units empty and drive up the price.... a high price is a market signal to produce more housing.
Americans are taught that the house is your primary wealth vehicle. People with homes don't want more housing because their net worth would cut in half, people without homes bitch about home pricing but still want to buy BECAUSE they are a wealth vehicle.
Until we move away from single family homes being the #1 "investment vehicle" for everyday Americans, the system is going to snap right in half before it gets better.
On the housing thing - there's been a major intrusion of private equity firms into the regular house market. A report came out recently claiming as much as 40% of all single family homes sold in 2023 went to private equity firms to turn into rental properties (iirc). On mobile, otherwise would try to actually give you the source.
I can't speak to the food price increases. My only thought is that most people are creatures of habit and always have been, so I doubt that individual shoppers 'not putting pressure on the stores' would explain a historic rise in costs. That said, if we did find evidence that shoppers are less savvy or willing to change habits, my first guess as to why would be people overall being more overworked and stressed. But until the data comes in, who knows.
That report was bs
https://www.housingwire.com/articles/no-wall-street-investors-havent-bought-44-of-homes-this-year/
Numbers don’t add up.
That's not what that says at all. What it says is that companies that own 100+ properties make up a 3% of the market. You can have a small-ish company that owns 50+ properties that acquires 10 more, and they won't make that list.
A wealth mom n' pop investor that buys up ten houses houses to flip--or to drive up rental prices on other properties they have--would still be private equity.
Look at the overall investor share, it was on a downward trend after the crash, and is only up a little. It's been mostly consistent for over a decade.
If private equity wants to invest in housing, that's great.
There is no fundamental limit on how much housing we can build.
Uh, yes there is. Infrastructure.
And what is that limit?
Then... What is the limit to how much housing we can put on 1 acre?
Up to 30 homes depending on lot size. Source: