Editor’s letter

In medicine, a patient suffering “locked-in syndrome” has a brain that’s fully alert and functioning but no ability at all to move or communicate. It’s one of the great medical horrors, invariably bringing up thoughts of being buried alive. “Lock-in” is a term in real estate (see Making Money, p.33), and it’s the worst kind of paralysis that can happen to the housing market. It signifies that owners who bought when interest rates were super-low can’t move, because a new house would be dramatically more expensive. Instead of prices falling and reaching a new equilibrium, homeowners stay put, sales collapse, and prices stay high. We are already faced with a national crisis of affordability. It’s happening not only in the obvious places—New York, California, Florida— but also in metro areas like Phoenix, where until quite recently the ideal of middle-class homeownership was alive and well.

The struggles of buying a home cascade through the social fabric in alarming ways. The rising cost of education and of homeownership together make Americans lose confidence in their futures, and their children’s future. It creates resentment, and polarization. And the polarization is made worse by the difficulty of moving. In an era of explosive growth in communications and technology, the rate of state-to-state migration is at its lowest level since the first half of the 20th century. The dearth of physical mobility limits economic mobility, and geographic segregation increases regional distrust and creates ideological monocultures. There is one bright spot in housing that may hold out hope for the future: Newly built houses are getting cheaper. It’s a small part of the market, but an important one. If the U.S. is to keep the American dream alive, we will need to build our way out of this. That’s something this country once knew how to do well—and can do well again.