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As a co-founder of PayPal and the first outside investor in Facebook, Peter Thiel is widely recognized for his expertise in tech. 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 upon the insights of 19th-century economist Henry George to underscore the gravity of America’s real estate crisis (1).
“The basic Georgist obsession was real estate, and it was if you weren’t really careful, you would get runaway real estate prices, and the people who owned the real estate would make all the gains in a society,” Thiel said.
The core of the issue, 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 the population in a city, and maybe the house prices go up 50%, and maybe people’s salaries go up, but they don’t go up by 50%,” he said. “So the GDP grows, but it’s a giant windfall to the boomer homeowners and to the landlords, and it’s a massive hit to the lower-middle class and to young people who can never get on the housing ladder.”
Thiel warned that this “Georgist real estate catastrophe” is playing out across many “Anglosphere countries,” including the U.S., Britain and Canada.
The surge in U.S. home prices has been nothing short of alarming for non-homeowners. Over the past five years, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index has climbed by 45% (2). This indicates that, on average, the value of a single-family home in the U.S. has nearly doubled in that five-year period.
Though there is reason to believe that growth could be slowing down. A Reuters poll of property experts suggests that U.S. home prices will rise just 1.4% in 2026 (3). While that increase would be relatively minimal compared to the last few years, it’s nevertheless an increase.
Thiel connected growing prices to inflation, stating, “There’s a way you could talk about inflation in terms of the prices of eggs or groceries, but that’s not that big a cost item, even for lower-middle-class people. The really big cost item is the 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 houses because of zoning laws, where it’s too expensive, where it’s too regulated and restricted, then the prices go up a lot,” he said. “And it’s this incredible wealth transfer from the young and the lower-middle-class to the upper middle class and the landlords and the old.”
Thiel isn’t the only one raising the alarm. Federal Reserve Chairman Jerome Powell has highlighted similar concerns.
“The real issue with housing is that we have had, and are on track to continue to have, not enough housing … It’s hard to find — to zone lots 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 housing market is significant. The U.S. had a housing shortage of 4.7 million properties in 2023, despite having added 1.4 million new homes, according to a Zillow report (4).
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Beyond soaring home prices, elevated mortgage rates are another major obstacle preventing many Americans from “getting on the housing ladder,” as Thiel described.
Mortgage rates are still stubbornly high: set to average at 6.28% in 2026, down from 6.32% in 2025, according to the poll.
The U.S. Federal Reserve has been cutting interest rates, and there are hopes they will continue to do so further. However, after the Fed’s December 2025 rate cut, Powell wasn’t as optimistic, saying: “The housing market faces some significant challenges, and I don’t know that a 25-basis point decline 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 obtaining quotes from three to five lenders to find an optimal rate (6). Keep in mind that shaving even a half a percentage point off a 30-year mortgage can lead to significant savings over the course of the term.
Then, once you’ve secured a mortgage, it’s time to start thinking about another big monthly expense: home insurance.
That’s where platforms like OfficialHomeInsurance.com can help out. In under two minutes, you can check out a selection of home insurance options from top providers in your area — potentially cutting down on the time and effort it takes to shop around. After all, much like with mortgages, taking time to compare offers can lead to big monthly savings. In some cases, you could even save an an average of $482.
You could also leverage fractional ownership to tap into rental property income. In 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 blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 A.M. tenant calls.
Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional quality offerings for a fraction of the usual cost.
Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10 to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.
Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.
Another way to leverage 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 shares of SEC-qualified investments in rental homes and vacation rentals, curated and vetted 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 your income level. Flexible investment amounts and a simplified process can help both accredited and non-accredited investors take advantage of this inflation-hedging asset class without the hassle of midnight maintenance calls over broken pipes or leaky faucets.
Commercial real estate for offices, unlike residential real estate, have faced high vacancy rates ever since the COVID-19 pandemic, in part due to a broad shift towards remote work. But some sectors, like grocery and retail, have been more resilient.
If you have capital on hand or an existing real estate portfolio, you could consider getting into this sector. After all, everyone needs groceries — even during tough times. One way to do this is with First National Realty Partners (FNRP), which can help you access grocery-anchored commercial real estate properties.
With a minimum investment of $50,000, accredited investors can own a share 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 cutting into potential returns. This means the 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 rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and 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. It is provided without warranty of any kind.
