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As co-founder of PayPal and first outside investor in Facebook, Peter Thiel is widely recognized for his technology expertise. But now, the billionaire venture capitalist is sounding the alarm in a completely different sector: real estate.
During an interview with Commonwealth Canada, Thiel drew on the ideas of 19th-century economist Henry George to underscore the severity of the United States’ housing crisis (1).
“The basic obsession of the Georgists was real estate, and it was that if you weren’t very careful, real estate prices would skyrocket and the people who owned them would reap all the profits in a society,” Thiel said.
The heart of the problem, Thiel explained, lies in the “extremely inelastic” nature of real estate, especially in regions with strict zoning laws.
“The dynamic ends up being that you add 10% to a city’s population, and maybe house prices go up 50%, and maybe people’s salaries go up, but they don’t go up 50%,” he said. “So GDP grows, but it’s a giant windfall for boomer homeowners and landlords, and it’s a massive blow to the lower middle class and to young people who will never be able to move up the housing ladder.”
Thiel warned that this “Georgist real estate catastrophe” is unfolding in many “Anglosphere countries,” including the United States, Britain and Canada.
The rise in home prices in the United States has been nothing short of alarming for non-homeowners. Over the past five years, the S&P CoreLogic Case-Shiller NSA Index of US National Home Prices has risen 45% (2). This indicates that, on average, the value of a single-family home in the United States has almost doubled in that five-year period.
Although there are reasons to believe that growth could be slowing. A Reuters survey of real estate experts suggests that US home prices will rise by just 1.4% in 2026 (3). While that increase would be relatively minimal compared to recent years, it is still an increase.
Thiel linked rising prices to inflation, stating, “There’s a way to talk about inflation in terms of egg prices or food prices, but that’s not that big of a cost, even for lower-middle-class people. The really big cost is rent.”
In essence, Thiel argued, the issue comes down to supply and demand.
“If you just add more people to the mix and you’re not allowed to build new homes because of zoning laws, where it’s too expensive, where it’s too regulated and restricted, then prices go up a lot,” he said. “And it’s this incredible transfer of wealth from the young and the lower middle class to the upper middle class, the landowners and the old.”
Thiel is not the only one raising the alarm. Federal Reserve Chairman Jerome Powell has highlighted similar concerns.
“The real problem with housing is that we have not had, and we are on track to continue having, enough housing… It is difficult to find lots in areas that are in places where people want to live… Where are we going to get the supply?” Powell said at a press conference in September.
The gap in the real estate market is significant. The United States had a housing deficit of 4.7 million properties in 2023, despite adding 1.4 million new homes, according to a Zillow report (4).
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Beyond skyrocketing home prices, high mortgage rates are another major obstacle preventing many Americans from “climbing the housing ladder,” as Thiel described.
Mortgage rates remain stubbornly high: They are expected to average 6.28% in 2026, up from 6.32% in 2025, according to the survey.
The US Federal Reserve has been cutting interest rates and there are hopes it will continue to do so. However, after the Federal Reserve’s rate cut in December 2025, Powell was not so optimistic, saying: “The housing market faces some significant challenges, and I don’t know that a 25 basis point decrease in the federal funds rate is going to make much of a difference for people. (5)”
While the Federal Reserve’s interest rate decisions are out of your control, there are ways to take control to secure the best mortgage rate possible. Freddie Mac recommends shopping around by getting quotes from three to five lenders to find an optimal rate (6). Keep in mind that shaving even half a percentage point off a 30-year mortgage can result in significant savings over the long term.
Then, once you’ve got a mortgage, it’s time to start thinking about another big monthly expense: home insurance.
That’s where platforms like OfficialHomeInsurance.com can help. In less than two minutes, you can check out a selection of home insurance options from top providers in your area, potentially reducing the time and effort it takes to shop around. After all, just like with mortgages, taking the time to compare offers can result in big monthly savings. In some cases, you could even save an average of $482.
You could also take advantage of fractional ownership to take advantage of rental property income. By doing so, you can gain exposure to real estate, without having to invest your life savings into an investment property.
Mogul is a real estate investment platform that offers fractional ownership in prime rental properties, providing investors with monthly rental income, real-time appreciation, and tax benefits, without the need for a large down payment or 3 a.m. tenant calls.
Founded by former Goldman Sachs real estate investors, the team curates the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in quality institutional offerings for a fraction of the usual cost.
Each property undergoes a vetting process, requiring a minimum 12% return even in negative scenarios. In general, the platform has an average annual IRR of 18.8%. Meanwhile, its cash-on-cash returns average between 10 and 12% annually. Offers usually sell out in less than three hours, and investments usually range between $15,000 and $40,000 per property.
Each investment is secured by real assets, regardless of the viability of the platform. Each property is held in a separate Propco LLC, so investors own the property, not the platform. Blockchain-based fractionation adds a layer of security, ensuring a permanent and verifiable record of each share.
Another way to take advantage of rental income is with crowdfunding platforms like Arrived, which allows you to enter the real estate market for as little as $100.
Arrived offers you access to SEC-qualified investment stocks in rental homes and vacation rentals, selected and vetted for their appreciation and income potential.
Backed by world-class investors like Jeff Bezos, Arrived makes it easy to add these properties to your investment portfolio, regardless of your income level. Flexible investment amounts and a streamlined process can help accredited and non-accredited investors take advantage of this inflation-hedge asset class without the hassle of midnight maintenance calls for broken pipes or leaky faucets.
Commercial office real estate, unlike residential real estate, has faced high vacancy rates since the COVID-19 pandemic, in part due to a broad shift toward remote work. But some sectors, such as food and retail, have been more resilient.
If you have available capital or an existing real estate portfolio, you could consider entering this sector. After all, everyone needs food, even in difficult times. One way to do this is with First National Realty Partners (FNRP), which can help you access supermarket-anchored commercial real estate properties.
With a minimum investment of $50,000, accredited investors can own a portion of properties leased by national brands like Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to triple net leases, you can invest in these properties without worrying as much about tenant costs reducing potential returns. This means tenants are responsible for property taxes, building insurance, and common area maintenance in addition to the base rent.
Even better, FNRP has closed over $2 billion in acquisitions and over $145 million has been distributed to investors.
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@Commonwealth Canada (1); St. Louis Fed (2); Reuters (3); Zillow (4); @NBC News (5); Freddie Mac (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
