Why Housing Is So Expensive, and the Myth of Timing the Market

Answering a Reddit question about making housing affordable, Scott Galloway argues that the central problem is supply, not demand. He says power over housing permits was shifted from local bureaucrats and civic officials to homeowners, whose incentives run against building: they prefer less traffic and construction, and limited housing increases the value of their primary asset. He describes this as regulatory capture in which incumbents deny new entrants admission to the club so existing members’ wealth rises. Galloway says demand-side policies make the problem worse. Low-income housing tax credits, mortgage-interest deductions, and first-time-buyer credits give people more purchasing power without increasing the number of homes, bidding up prices against a fixed supply. He recommends federal and local rules tying access to federal funds to permitting, tax credits for developers, and fewer NIMBY restrictions. Austin and Minneapolis are cited as examples of cities that improved affordability by removing height limits and parking requirements that forced expensive garages. He cites a 2020 Brookings study saying regulations prevent anything other than detached single-family homes on 75% of the land in most U.S. cities. Duplexes, triplexes, and fourplexes fell from 7% of new completions in 1979 to 1.1% in 2025. He also says 20% of middle-income renters could not pay full rent at least once in 2025, up from 14% in 2024, while the comparable low-income figure was 28%, up from 24% in 2019.

Galloway challenges Robert Shiller’s conclusion that housing underperforms most other asset classes after taxes and maintenance. He says that analysis misses housing’s “psychic ROI”: pride of ownership, having a nest, and the way a home can support relationships and family decisions. He does not claim buying is always correct. He recommends comparing annual rent with the purchase price; in cities where rent is relatively cheap compared with the cost of buying, renting may be the better choice, and he advises consulting real-estate professionals, friends, and AI tools. His other argument is behavioral. If someone is told to invest $2,100 each month in a Vanguard index fund, they may spend the money on a car or a trip instead. Mortgage payments create forced saving because people generally keep paying rather than risk losing their homes. He says a house may not appreciate as quickly as the S&P 500 nationally, although some local markets can do as well or better, and homeownership also offers tax advantages: mortgage-interest deductions and, when selling, up to $250,000 of tax-free gain for an individual or $500,000 for a married couple. He returns to his main policy conclusion: the country should unleash private-sector construction through economic incentives and lower the regulatory barriers imposed by national and local NIMBY politics. Flooding buyers with credits does not solve affordability when too few homes are allowed to be built.

A listener regrets selling a large position in a technology company to close on a Brooklyn townhouse after the stock rose substantially. Galloway calls this a normal consequence of having scarce resources: people sometimes sell assets to pay for a school, a home, or another family priority, and the asset sold may later become more valuable. His advice is to distinguish regret from a bad decision made with the information and constraints available at the time. He draws on work by his NYU colleague Adam Alter, who studied regret and interviewed people in palliative care. Their regrets, in reverse order, included not staying in closer touch with friends, not living the life they wanted rather than one dictated by parents, society, a spouse, or themselves, and—most commonly—not being less hard on themselves. Galloway recognizes that tendency in himself: after a successful speech at UC Santa Barbara, he focused more on the things he could have improved, including saying something provocative or dropping an unnecessary F-bomb, than on the success. He also points out that the listener exchanged one appreciating asset for another: the Brooklyn home may have risen too, and the purchase invested in the listener’s family. The key is that it was nearly impossible to time both the top of the stock and the bottom of real estate. “You need to time your life,” he says. Owning a townhouse, having a family, and having had enough stock to make the purchase are, in his framing, “the mother of good problems”—an inconvenience, not a true crisis.

Responding to a couple facing infertility after two unsuccessful IVF rounds and considering surrogacy, Galloway says later parenthood is increasingly common. He cites CDC data that roughly one in five married women ages 15 to 49 with no prior births cannot become pregnant after a year of trying. The average age of first-time fathers rose from 27 in 1972 to 31 in 2016, and he says more women now have babies over 40 than under 21. He adds that lower birth rates create economic problems, though the U.S. is demographically better positioned than much of Europe, Japan, and China partly because immigration can relieve demographic pressure. Galloway became a father at 42 and 45 after initially preferring a selfish, child-free life. His partner wanted children, and when she said she could not have a long-term relationship with someone who did not, he changed his position; they became pregnant almost immediately and had two children within three years. He believes age made him a better father because he had more perspective, patience, generosity, and economic security. He could spend time with his children without the same anxiety he would have felt while still trying to build financial stability. The downside is potentially missing grandchildren, but he says children motivate him to stay healthy and make him model better behavior. He advises the listener not to overthink parenthood if they have a good partner or some economic security: pursue IVF or surrogacy if possible, and remember that adoption is also a meaningful path. His strongest conclusion is that the emotional reward and purpose of having children surprised him.

A 27-year-old listener in Chicago loves his well-paid job but is tempted by a business idea from his physician father, who has practiced for more than 20 years. Galloway first separates two situations. If the father already has a successful operating business and the son would eventually join or inherit it, the risk is different; he says students entering family businesses often first work at IBM or another outside company to develop skills and learn to function where nobody will favor them because of their last name. If this is a raw startup, however, Galloway advises staying in the current job for now. He says five or six out of seven new businesses are no longer around after seven or eight years, and that the premise “no business makes sense at the time; otherwise it would already exist” captures the uncertainty. He argues that an established U.S. corporation or platform can be the greatest risk-adjusted wealth generator: it supplies resources, intellectual property, colleagues, benefits, culture, and senior sponsorship. A young employee who likes the work, receives stock options, is advancing, and is not dreading Sunday nights may be undervaluing that opportunity by comparing it with the mythology of entrepreneurship. He recommends assembling a “kitchen cabinet” of advisers, openly comparing compensation and career momentum with the proposed startup, and having a candid conversation with the father. Family startups add emotional risk: if the market defeats the company, the disappointment and opportunity cost can damage the relationship. Galloway’s own Morgan Stanley experience taught him that navigating a large organization is a real skill, even though he was politically immature and poor at the work. He suspects the listener may already possess that skill and should not give it up casually.

The final listener asks how fathers should respond when a spouse prioritizes answering a child’s every want, distracting the child, and stopping crying immediately, partly based on Instagram child-development advice. The listener also worries about becoming roommates because the child is treated as the primary focus. Galloway says he is not a parenting expert, but cites data that Millennial and Gen Z fathers spend roughly twice as much time with their children as fathers did 40 years ago, and that working fathers now spend more time with their children than working mothers did 40 years ago. He sees more engaged fathers as socially beneficial and possibly connected to falling crime, suicide, opioid deaths, and deaths of despair, while acknowledging that many factors are involved. His practical advice is to have open, honest conversations about parenting and to be generous with one another. However, he says that in his own family he generally defers to the mother on major child-rearing decisions because he believes mothers often have stronger intuition about what is happening with a child. He describes his partner detecting immediately when a son was awake or when something had gone wrong at school, even when he saw nothing unusual. He stresses that deference does not excuse a father from being present, involved, or responsible. Galloway also frames being a good father as being an excellent partner. Mothers face pressure to be nurturing, professionally successful, attractive, civic-minded, and much more, so fathers should actively support them. He says fathers may have a different disciplinary presence—not physical punishment, but the seriousness created by being larger and having a deeper voice. His suggested model is to state a view, defer on many key decisions, and let children see respect for their mother. There is no universal owner’s manual, he concludes, because parenting books often contradict one another.