> the private housing sector is not going to build sufficient housing stock to tank prices in... the private housing sector.
> yet builders are loathe to invest in a major way, fearing a downturn that will impact their profit margins, even though they stand to make big bucks.
The second quote doesn’t flow from the first. The second quote is correct - builders aren’t building not because they don’t want to tank housing prices, but because of concerns about the economy. In a capitalist system with thousands of players, it there are expectations of profits there will be construction even if it drives down the profits of the industry as a whole (that’s the free market, eliminating excess profits). The issue has nothing to do with mass collusion to keep prices high and everything to do with concerns about the economy and the current interest rate environment.
The second quote isn't entirely related to the first. "Sufficient housing stock to tank prices" is an enormous amount of housing, the likes of which are not contemplated by traditional builders, who are out to build high profit margin housing at prices the market will bear. That's the system that needs disruption. It's not de jure collusion, it's a mature industry with mature players who have been on the search for blockbuster profits in recent memory. The average home size has skyrocketed over the last forty years, builders and their financiers are no longer content to make a living building homes, they want to hit home runs every time. It's time to incentivize smaller players in the market and to steer them towards building cheaper housing with smaller profit margins.
> yet builders are loathe to invest in a major way, fearing a downturn that will impact their profit margins, even though they stand to make big bucks.
The second quote doesn’t flow from the first. The second quote is correct - builders aren’t building not because they don’t want to tank housing prices, but because of concerns about the economy. In a capitalist system with thousands of players, it there are expectations of profits there will be construction even if it drives down the profits of the industry as a whole (that’s the free market, eliminating excess profits). The issue has nothing to do with mass collusion to keep prices high and everything to do with concerns about the economy and the current interest rate environment.