I think the mainstream consensus is that this is a supply and demand issue. The supply of homes is just not sufficient to meet the demand. But, while that’s true, it doesn’t explain why there is an insufficient supply of housing, relative to the demand. The reason is really quite simple: land is finite. Americans demand a detached, single family home with a yard and an attached garage. Only so many such low density homes can be built in any given area. That’s just a physical reality.
If you want a detached, single family home, with a yard, you can easily find one in many, many places in the US for WELL below $1,000,000. I did. My wife and I built a home on about an acre and a half of land, and it only cost us around $250,000. However, we are in a very rural area, in the interior of the country. The nearest major metro area is about an hour’s drive. If we were to try and buy a similar home nearer to the metro center, with all of its jobs and amenities, we would have to pay much more.
I think Americans are going to have to make a choice: if you want a detached, single family home, but you don’t want to (or can’t) spend the money it costs to buy one in a major metro area, you’re going to have to either give up your dream of owning a single family home, or you’re probably going to have to move pretty far out of the metro area, since even the suburban areas around most major cities are pretty full.
The American dream is dead (for most), at least in already very populated areas. It really is that simple. If you want to live in a major metro urban, or suburban area, you’re probably not going to be able to own your own single family home. You’re probably going to have to rent. (Edit: I should add that people might still be able to own, but it’s going to be condos or townhouses, not detached, single family homes). And we’re going to have to change the zoning laws so that more high and middle density housing can be built. If that doesn’t sound good to you, and you really want to own your own single family home, you’re probably going to have to move to a rural area and/or move to the middle of the country, to one of the “fly over” states.