[Puffer Fish]

I recently saw a news video titled "Millennial homeowners shift toward renovating instead of selling".

There seems to be multiple news articles about this, from all different sources.
A few highlights:

"Millennial homeowners, rather than sell their starter homes and move, are staying put and spending their money on expansions and improvements,"
"It's likely cheaper for them to renovate than to buy a bigger, more expensive home at the higher rate,"

It appears that homeowners in the 26-41 age group are unable to afford "moving up", and rather are stuck in the starter homes they are already in.
This is probably due to the chronic housing shortages in many areas driving home prices up.

I notice many of those on the Left seem focused on "demand-side" solutions, like trying to increase wages of lower income groups, or having the government throw lots of money at the problem.
But what about "supply-side" solutions? Why is there so little focus on what's making housing so expensive in the first place?
This includes examining the country's immigration policies and looking at overcrowding and local population growth over time.

[Puffer Fish]

The problem is that there are no affordable houses, and by staying put these home owners are contributing to the lack of housing. Everyone is staying put. And that's the problem. And of course no new homes are being built.

One has to wonder how that's affecting the job market because people aren't moving to where the jobs are. Good jobs, better jobs? No one is moving up the career ladder. And we wonder why the income gap is getting bigger?

I have read in news articles that one reason why people are not moving - why everyone is "stuck" - is because they locked in good interest rates (like around 3%) on their mortgages for their homes, and since then high levels of inflation have happened. If they were to sell their home and try to take out a loan to buy another home, they would never be able to get rates as good as they have.

[Puffer Fish]

you can't just blame greedy rich people or capitalism. Government policies had a big role in shaping the present situation. (And the effects of many of these policies cannot easily be undone and are long-term)

I'm particularly thinking of immigration leading to high levels of population growth concentrated into already overcrowded city areas. Any time a shortage is created, that is oftentimes the kindling for speculation, hoarding, and speculative buyers trying to take advantage of the situation. It's really hard to hoard some commodity in the market and drive up prices when a scarcity of that commodity does not really exist in the first place. In my personal view, "greed from investors" is almost kind of secondary to the real underlying problem. Any time there is a scarcity of something, it will drive prices up. There is not enough for every person who is trying to get it, so desperate people will bid the prices up. Many of these areas have a lack of additional land space for building on, so that is more than half the problem.
But it's also true that it's more expensive for the economy to build new houses. If there is a shortage of affordable housing that is driving up prices, building new houses may help prevent the home prices from rising beyond a certain level but it will NOT prevent prices from rising. In a free market, prices have to first rise to reach a certain threshold before it justifies the cost of building new homes. So the building of new homes does not completely relieve the shortage, since the price of the previous old homes was lower before the shortage.

But there are other government policies as well that shaped this situation.

[late]

When I bought my first home, a typical mortgage was 12%. Very, very few first timers could swing that. I got my house with a state/Federal partnership that lowered the interest rate to 9%.

So this isn't new...

Direct help is obvious, and simple. Lowering prices is neither. I am unclear how a country would go about doing that.

Immigration is not a problem, not with real estate prices. There are problems, like zoning.

But there is also a new problem, and it's big. There is too much money floating around out there, and what is happening is that corporate investors are gobbling up homes like they were M&Ms.

[Puffer Fish]

Another past government policy that contributed to this situation was holding down interest rates for too long in the past and expansion of the money supply creating inflation which then is driving interest rates higher, causing homeowners with mortgages to be stuck.

(since they can't move their the mortgage loan they are paying on to a new house)