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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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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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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.
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
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