&gt; 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>In effect a transfer of taxpayer money to developers and mortgage originators.<p>&gt; 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.<p>That would only work if you also abolish laws regulating the supply and liquidity of the land and housing market, like zoning laws and restrictions on property taxes (such as California&#x27;s infamous Proposition 13: <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;California_Proposition_13_%281978%29" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;California_Proposition_13_%281...</a>).<p>Without also freeing the supply side of the market, a lower home ownership rate will just be a forced transfer of wealth to rental property landlords.<p>Zoning laws and sales disincentives are pushing land values so high in major metropolitan areas that it is commercially unfeasible for developers to significantly increase density or supply. They are effectively restricted to building medium-density luxury housing to make a projected profit. Unfortunately between the shrinking middle class, decreasing social mobility, and coming self-driving car commuting patterns this is just inflating another real estate bubble.