The biggest driver, arguably, of elevated home prices in the past 2 years has been [real ] interest rates that are effectively negative against inflation. The result is buying of property under fixed rate loan to short the USD.
That's not true. Most homes are still being bought to live in. The supply of SFH in decent places is just always too puny to meet housing needs.
Cashing out comes with the hassle to move, and is less attractive during pandemic. Rich people that want to decamp boost up demand in the select few popular remote places. That was the 2020 story.
Recently I am less sure exactly what's going, but yeah, single family homes are the worst!
People have always wanted to buy homes to live in. I'm talking about the large increase in prices in the last 2 years. [negative real] Interest rates are definitely a big reason for the asset appreciation.
Even if that is the case, SFH for being stupid not interest rates for being low is the proper scapegoat.
The rest of the inflation is due to pandemic-related supply side dysfunction, and fossil fuels which are even more subject to random things like OPEC whims.
Raising rates to bring down SFH prices and not reforming the SFH system would be colossally stupid.
