from https://finance.yahoo.com/news/billionaire-peter-thiel-warns-looming-170746602.html

Billionaire Peter Thiel Warns of a Looming Real Estate 'Catastrophe'—A 'Massive Hit to the Lower Middle Class and Young People' Who Can't Buy Homes

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Jeannine Mancini
Wed, March 19, 2025 at 10:07 AM PDT 4 min read


1.3k
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Peter Thiel, the billionaire co-founder of PayPal and one of Facebook's earliest investors, has built his fortune spotting economic trends
before they explode. But his latest warning has nothing to do with tech
or startups. Instead, he's calling out what he sees as a massive problem
in real estate—one that's making it nearly impossible for young
Americans to afford a home.


Speaking with The Free Press back in December, Thiel pointed to the
ideas of 19th-century economist Henry George to explain why
homeownership is becoming a pipe dream for younger generations while
older homeowners reap the benefits.

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The Housing Market's Broken Math
Thiel lays it out simply: When a city's population grows by 10%, housing
prices can spike by 50%. But wages? They don't rise nearly as fast. So
while the economy might be expanding, the real winners are homeowners—especially older generations, specifically boomers—while
young and lower-middle-class Americans find themselves locked out of homeownership, struggling to compete in a market that keeps pushing
prices higher.

"And it's a massive hit to the lower middle class and to young people
who can never get on the housing ladder," Thiel said.


And this isn't just a U.S. problem. Thiel warns that the same "real
estate catastrophe" is unfolding in Britain, Canada, and other countries
where strict zoning laws make building new homes nearly impossible.

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Why Rent, Not Eggs, Is the Real Inflation Problem
People love to talk about inflation when egg prices jump a few bucks,
but according to Thiel, that's not the real issue. "The really big cost
item is the rent," he said. Even when grocery prices fluctuate, most people—especially the lower middle class—aren't seeing those costs eat
up the bulk of their paycheck. Housing, on the other hand, is a
different story.

Thiel argues that rent inflation has been ignored for too long. While
some blame rising costs on immigration, he points to zoning laws and
excessive regulations that make building new homes nearly impossible. If
demand keeps growing and supply can't keep up, prices surge—leading to
what he calls an "incredible wealth transfer" from young renters to
older landlords and upper-middle-class homeowners.

What Needs to Change?
Thiel believes fixing the housing crisis starts with zoning
reform—making it easier and cheaper to build homes. Right now,
restrictive policies choke supply and drive up costs, leaving younger
Americans priced out of the market. Without serious change, the gap
between homeowners and renters will only widen, with long-term economic
and social consequences.

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And the numbers back him up. The average age of U.S. homebuyers has
jumped from 49 in 2023 to 56 in 2024, according to the National
Association of Realtors' annual State of the Market report released in November. That's a staggering six-year leap in just over a year—clear evidence that younger Americans are being squeezed out of homeownership
as costs skyrocket.

For existing homeowners, this trend is a goldmine—home values are
climbing, and the market favors those who already have property. But for younger Americans trying to buy their first home? Thiel's outlook is
bleak. Without major policy shifts, homeownership will stay out of reach
for many, and rents will keep climbing—deepening the divide between
those who own and those who can't.

Thiel's take isn't just theoretical—he's putting a spotlight on a
housing system that, for many, feels completely rigged. Whether or not policymakers listen remains to be seen. But one thing is clear: If
you're a young American hoping to buy a home, the road ahead isn't
getting any easier.

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This article Billionaire Peter Thiel Warns of a Looming Real Estate 'Catastrophe'—A 'Massive Hit to the Lower Middle Class and Young People'
Who Can't Buy Homes originally appeared on Benzinga.com


View Comments (1.3k)

X
19 March, 2025
The wealthy do NOT keep their money in the bank. They invest. Mainly in
real estate because its stable and usually increases. Dont believe a
wealthy person or politician when they say they want to bring down home
prices. That would make them less rich

Fraud Hoax GIF



Harvey's significant other
2 days ago
There should be a limit on the percentage of corporate owned housing
permitted in any given community. Their deep pockets drive up prices
causing the very problems he mentioned as well as limiting availability
to hopeful home buyers.

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