Because the amount of goods and labor required to build a house (that can be lived in for decades) is typically a lot more than what an individual can save up for in any reasonable amount of time.
You're missing the forrest for the trees with all your handwaving about the money supply.
Houses are big and expensive and sit on land that is in finite supply (especially in high demand areas). People are generally a lot better off if they can pay this purchase off over time while living in it rather than saving up to pay for the whole thing all at once while also paying to live somewhere else.
>Because the amount of goods and labor required to build a house (that can be lived in for decades) is typically a lot more than what an individual can save up for in any reasonable amount of time
That works both ways though, the reason housing is so expensive is because borrowing is so cheap and easy. The cost of land, materials and regulation has expanded to match the available funds.
The available funds is irrelevant to my point because costs increase in proportion everywhere. If we 2x the amount of money in the system a house will cost twice as much...but so will the cost of a person's labor.
But the ratio of the cost of a house to a person's labor will stay constant.
You're missing the forrest for the trees with all your handwaving about the money supply.
Houses are big and expensive and sit on land that is in finite supply (especially in high demand areas). People are generally a lot better off if they can pay this purchase off over time while living in it rather than saving up to pay for the whole thing all at once while also paying to live somewhere else.