---
title: They don’t build ’em like they used to
description: Inflation is causing a massive spike in housing prices, and 1st-time buyers are getting burned.
---

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# [They don’t build ’em like they used to](https://hs-sbup.thehustle.co/news/01142022-homes)

 Written by [Morgan Housel](https://hs-sbup.thehustle.co/news/author/morgan-housel) | Jan 14, 2022 10:42:40 AM

*Data Source: Federal Reserve*

Inflation is now at the [highest level in 40 years](https://www.wsj.com/articles/us-inflation-consumer-price-index-december-2021-11641940760).

Nowhere is that more apparent than in housing, where nationwide home prices [are now nearly 50% above](https://fred.stlouisfed.org/series/CSUSHPISA) the levels seen during the 2006 housing bubble.

If you’re in the market for a new home, you know how crazy it’s gotten. Perhaps you’ve been outbid on a home to somebody offering [*double *the asking price](https://www.cnn.com/2021/06/16/homes/us-housing-market-offers/index.html).

#### **What’s happening?**

All big problems like this are complicated, caused by dozens of different variables.

But here’s a big one, and it’s simple: We just don’t build enough homes.

- Millennials are [now the largest cohort](https://www.pewresearch.org/fact-tank/2020/04/28/millennials-overtake-baby-boomers-as-americas-largest-generation/) of working Americans. Many are now approaching 40 years old, and are eager to finally buy a home. When baby boomers were in a similar spot in the 1970s and 1980s, we were building, on average, about 60% more homes relative to the size of the population.
- The housing bust of the mid-2000s shattered the homebuilding industry, and it simply never recovered. There are a quarter fewer carpenters in America today [than there were 20 years ago](https://fred.stlouisfed.org/series/LEU0254505500A).

#### **Here’s a quirk of surging housing prices that’s easy to overlook:**

If you already own a home, the surge is probably a wash for you, because if you sell a house that’s gone up in value you probably use the proceeds to purchase another house that’s gone up in value.

But if you’re a 1st-time homebuyer, oof. It’s brutal. Rising home prices mean you have to come up with a higher and higher down payment — if you can find a house at all.

It’s time to build.

[View full post](https://hs-sbup.thehustle.co/news/01142022-homes)

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