On today’s show we are talking about why the math of home affordability is broken. The critics of home affordability put the blame at the feet of developers and home builders for not building affordable homes.
But the price of homes in the resale market is set entirely by market forces. This is a function of the laws of supply and demand, combined with the ability to pay.
The simplest evidence of that is the fact that many homes were selling above asking price over the past three years. There is nothing forcing a buyer to offer above the asking price for a home.
Who is to say that homes should cost less, when clearly buyers are willing to pay more. The value of any asset is always viewed through the eyes of the buyer and what they are able and willing to pay.
Host: Victor Menasce