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What is the average price of such a "large" house built new?

True: Builders aren't building starter homes because they are not profitable. Higher prices are needed.
False: Building more homes won't increase affordability. Building more homes increases supply. Higher supplies lead to lower prices.

Heraclitusstudent says

What is the average price of such a "large" house built new?

If you want to take the King... Toll Brothers is between 850K-900K for a median price home

Strategist says

False: Building more homes won't increase affordability. Building more homes increases supply. Higher supplies lead to lower prices.

We had the biggest build of new homes 2002-2006 and it did nothing for housing affordability what so ever

Logan Mohtashami says

We had the biggest build of new homes 2002-2006 and it did nothing for housing affordability what so ever

Because demand increased faster than supply.

Strategist says

Because demand increased faster than supply.

Fueled by the Fed, Mozilo and type characters.

Strategist says

Builders aren't building starter homes because they are not profitable.

Corrected:
Builders aren't building starter homes because they are not as profitable.

Strategist says

Because demand increased faster than supply.

We had good demographics from 1996-2007

But not that good, the fact that they kept building bigger and bigger homes post Great Recession shows the concern for profit margins they have.

This has been going on for 4 decades and a new home will never be cheaper than an existing home ( apple to apple)

I don't blame the builders at all.. look, they have more supply in this cycle than the previous but missing out on a lot sales, they had make that up somehow

indigenous says

Strategist says

Because demand increased faster than supply.

Fueled by the Fed, Mozilo and type characters.

True. Easy credit fueled a demand boom.

Logan Mohtashami says

Strategist says

Because demand increased faster than supply.

We had good demographics from 1996-2007

But not that good, the fact that they kept building bigger and bigger homes post Great Recession shows the concern for profit margins they have.

This has been going on for 4 decades and a new home will never be cheaper than an existing home ( apple to apple)

I don't blame the builders at all.. look, they have more supply in this cycle than the previous but missing out on a lot sales, they had make that up somehow

Building bigger homes over the decades reflects a rising standard of living in America. We are wealthier, we can afford bigger homes.

What would bring down the price of housing?

Deporting 11 million illegals. They don't live in caves.

Logan, if your point is that it won't bring down prices faster than other factors will increase prices, fine. If your point is that building large houses has no effect on house prices across the board, I don't get it.

Could there be over-investment in these bigger houses?

YesYNot says

Logan, if your point is that it won't bring down prices faster than other factors will increase prices

One of the things that I have tried to point out here is that median home price cooling for new homes isn't a bad thing because sales are so low still that the mix shift in sales data point of bigger homes and smaller homes can impact the median price

The problem is that people can't explain why new homes sales

- have missed new home sales estimate 3 years in a row
- why new home sales are still at recessionary levels
- why new home sales prices adjusting to inflation are at all time highs

It's simple, 4 decades of building bigger and bigger homes in a 4 decade push of having smaller and smaller family sizes has created a permanent inflationary factor, that the builders them selves don't want to fix, I don't blame them they can't make $$$ on smaller homes

indigenous says

Could there be over-investment in these bigger houses?

Not likely. There is an underinvestment of all home types. Since the crash the population has increased by more than 20 million people, but home building is at dangerously low levels. Home prices must, and will increase.

YesYNot says

What would bring down the price of housing?

For existing homes, you need a recession, a recession will create more supply and has been the only factor that has created 6 months plus annual months, in this case for housing, 2006, the first head year of the housing bust

YesYNot says

Deporting 11 million illegals. They don't live in caves.

Not a big factor for existing homes market

I have created a better demand curve thesis for years 2020-2024 and in doing that I have check and counter my own thesis as well and what might impact that demand curve.

So, the housing inflation thesis is the only thing I can see impacting demand at that point because the human supply factor will be a lot higher then

Logan Mohtashami says

housing inflation thesis is the only thing I can see impacting demand at that point because the human supply factor will be a lot higher then

What about how technology could influence the housing industry, or the demand moving because of telecommuting?

How does a recession create more supply? 11 million are 0.3% of the population. Does a recession cause so much doubling up that it has a bigger impact than 0.3% give or take reduction in demand?

Logan Mohtashami says

YesYNot says

Deporting 11 million illegals. They don't live in caves.

Not a big factor for existing homes market

That would only leave about 1 million houses empty.

YesYNot says

How does a recession create more supply?

In housing now, a job loss recession would create a distress property, post 1996 since the inflation price gap deviated from historical trends, we have never had 6 months annual month of supply for existing homes outside 2006-2011. Housing bust and recession combined.

So, it's very long in this cycle now and still no 6 months of supply because we are not a natural 6 month inventory country for existing homes, new homes on the other hand I believe high water mark in this cycle has been 5.8 months, but the builders have more control over that process

zzyzzx says

That would only leave about 1 million houses empty.

That would assume illegal immigrants own homes