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As the co-founder of PayPal and the first outside investor in Facebook, Peter Thiel is widely recognized for his technology expertise. But now the billionaire venture capitalist is sounding the alarm on an entirely different sector: real estate.
During an interview with Commonwealth Canada, Thiel drew on the ideas of 19th-century economist Henry George to emphasize the severity of America’s housing crisis (1).
“The Georgist’s basic obsession was real estate, and if you weren’t really careful, you’d get real estate prices out of whack, and the people who own real estate would get all the gains in a society,” Thiel said.
The heart of the problem, Thiel explained, is the “extremely inelastic” nature of real estate, especially in regions with strict zoning laws.
“The dynamic ends up being that you add 10 percent to the population in a city, and maybe house prices go up 50 percent, and maybe people’s wages go up, but they don’t go up 50 percent,” he said. “So GDP is up, but it’s a huge hit to boomer homeowners and homeowners, and it’s a massive hit to the lower middle class and young people who can never get on the housing ladder.”
Thiel warned that this “Georgian real estate catastrophe” is unfolding in many “Anglosphere countries,” including the US, UK and Canada.
Rising US home prices have been nothing short of alarming for non-homeowners. Over the past five years, the S&P CoreLogic Case-Shiller US National Home Price NSA Index has climbed 45% (2). This indicates that, on average, the value of a single-family home in the US nearly doubled over that five-year period.
Although there is reason to believe that growth could slow. A Reuters survey of real estate experts suggests that US home prices will rise by just 1.4% in 2026 (3). While this increase would be relatively minimal compared to recent years, it is still an increase.
Thiel linked rising prices to inflation, saying, “There’s a way you can talk about inflation in terms of the prices of eggs or food, but that’s not such a big cost item, even for people in the lower middle class. The really big cost item is rent.”
At its core, Thiel argued, the issue boils 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 and the homeowners and the elderly.”
Thiel is not alone in sounding the alarm. Federal Reserve Chairman Jerome Powell highlighted similar concerns.
“The real problem with housing is that we haven’t had and we’re not going to continue to have enough housing… It’s hard to find – to zone lots that are in places people want to live… Where are we going to get the supply?” Powell said at a news conference in September.
The gap in the housing market is significant. The US had a housing shortage 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 rising home prices, high mortgage rates are another major obstacle preventing many Americans from “getting on the housing ladder,” as Thiel described it.
Mortgage rates are still stubbornly high: set to average 6.28% in 2026, down from 6.32% in 2025, according to the survey.
The US Federal Reserve has cut interest rates and there are hopes that it will continue to do so further. However, after the Fed’s December 2025 rate cut, Powell wasn’t as bullish, saying, “The housing market is facing some significant challenges, and I don’t know that a 25 basis point cut in the federal funds rate is going to make much of a difference for people. (5)”
While the Fed’s interest rate decisions are out of your control, there are ways you can take control of securing the best mortgage rate possible. Freddie Mac recommends shopping around by getting quotes from three to five lenders to find the best rate (6). Keep in mind that even half a percentage point down on a 30-year mortgage can add up to significant savings over the term.
Then, once you’ve secured a mortgage, it’s time to start thinking about another big monthly expense: home insurance.
Platforms like OfficialHomeInsurance.com can help you there. 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 required to shop. After all, just like with mortgages, taking the time to compare offers can lead to big monthly savings. In some cases, you can even save an average of $482.
You can also take advantage of fractional ownership to take advantage of rental property income. By doing so, you can gain exposure to real estate – without pouring your life savings into an investment property.
Mogul is a real estate investment platform offering fractional ownership in prime rental properties that provides investors with monthly rental income, real-time appreciation and tax benefits – without the need for a large down payment or 3am calls from tenants.
Founded by former Goldman Sachs real estate investors, the team handpicks the top 1% of single-family rental homes across the country for you. Simply put, you can invest in quality institutional offerings for a fraction of the usual cost.
Each property is subject to a vetting process, which requires a minimum return of 12% even in downside scenarios. Overall, the platform shows an average annual IRR of 18.8%. Their cash-on-cash returns, meanwhile, average between 10 and 12% annually. Listings often sell in less than three hours, with investments typically ranging from $15,000 to $40,000 per property.
Each investment is secured by real assets, which do not depend on the viability of the platform. Each property is held in a self-contained Propco LLC, so investors own the property, not the platform. Blockchain-based sharding adds a layer of security, ensuring a permanent and verifiable record of every stake.
Another way to boost your rental income is with crowdfunding platforms like Arrived, which let you get into the real estate market for as little as $100.
Arrived gives you access to SEC-qualified investment shares in rental homes and vacation rentals, curated and screened for their appreciation and income potential.
Backed by world-class investors like Jeff Bezos, Arrived makes it easy to fit these properties into your investment portfolio, regardless of income level. Flexible investment amounts and a streamlined process can help both accredited and non-accredited investors take advantage of this inflation-hedging asset class without the hassle of midnight maintenance calls for broken pipes or leaking faucets.
Commercial office real estate, unlike residential real estate, has faced high vacancy rates since the COVID-19 pandemic, in part due to a widespread shift to remote work. But some sectors, such as food and retail, have been more resilient.
If you have capital on hand or an existing real estate portfolio, you may want to consider getting into this sector. After all, everyone needs food – even in hard times. One way to do this is with First National Realty Partners (FNRP), which can help you access grocery-anchored commercial real estate.
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 that provide essential goods to their communities. Thanks to triple net leases, you can invest in these properties without worrying about cutting tenant costs into potential profits. That means tenants take care of property taxes, building insurance and common area maintenance — plus base rent.
Even better, FNRP has closed over $2 billion in acquisitions, with over $145 million distributed to investors.
We only rely on verified sources and credible third-party reports. For details, see our ethics and editorial guidelines.
@Commonwealth Canada (1); St. Louis Fed (2); Reuters (3); Zillow (4); @NBC News (5); FreddieMac (6)
This article provides information only and should not be construed as advice. Offered without warranty of any kind.
