More than half of US renters believe they'll never own a home, and 80 percent of Americans say homeownership is slipping out of reach. Meanwhile, the average age of a first-time buyer has jumped from 33 to 40 in just five years, and the average buyer overall has reached a record 59 years old. How did it get so bad, and why do homes feel so out of reach?

The answer to this question can be summarized by four simple but devastatingly sad points:

Home Price Inflation: Monetary debasement (the inflationary expansion of the US money supply) has driven the cost of housing up. This has led to more houses and property being used as an investment, not shelter, as people look for places to protect their wealth across time.
Savings Erosion: Monetary debasement has simultaneously eroded one's ability to save for a home. Wages have failed to keep pace with both home prices and monetary expansion, while cash savings lose purchasing power each year. For most households, saving enough to purchase a home outright has become nearly impossible.

Debt Dependency: This dynamic has forced households to rely on debt, primarily through long-term mortgage products such as the 30-year, fixed-rate mortgage, to access housing.
Reversal in Rates: For four decades (1981-2021), falling mortgage rates have masked the extent of the affordability issue. Lower rates offset rising home prices and kept monthly payments manageable. But, since 2022, that trend has reversed: mortgage rates have surged alongside record home prices, triggering a sharp collapse in affordability.

Step 1: Home Price Inflation

The supply of dollars and credit in the United States has expanded continuously through Federal Reserve policy and government-sponsored credit creation. Since official tracking began in 1959, the total money supply has grown from $286 billion to $21.5 trillion at the end of 2024—a 7,409 percent increase in the total supply, and 99 percent wealth devaluation for anyone holding dollars over that time.

As a result, more dollars now compete for a limited number of houses and prime real estate. Despite major productivity gains in construction materials and methods, the price of housing has risen dramatically over time. The chart below illustrates this relationship, with the median home price (in red) closely tracking the growth of the money supply (in blue). This increase in monetary supply has masked real productivity increases in the development of homes, as real home prices (home price divided by the money supply) have dropped ~60 percent since the official tracking of home prices in 1963, while nominal home prices have increased 2,242 percent instead.