<i>&gt; The average person seems to simply pay &#x27;&#x27;as much as they can afford&#x27;&#x27; for housing.</i><p>And the government has made the problem worse, by skewing the mortgage market with ultra-low interest rates and thereby making &quot;as much as they can afford&quot; significantly larger.<p><i>&gt; The best solution is to redesign the economy</i><p>No, the best solution is to stop messing with it. If long-term interest rates were set by a free market, significantly fewer people would be able to buy homes, or at least homes of the size they&#x27;re buying now in the areas they&#x27;re buying now. So they would either choose to live in less populated areas, or they would choose smaller homes, or they would rent instead of buy. All of those things would reduce the average cost of housing compared to other things.