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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 technology. But now, the billionaire venture capitalist is sounding the alarm on a completely different sector: real estate.
During an interview with Commonwealth Canada, Thiel drew on the knowledge of the 19th century economist Henry George to emphasize 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 profits in a society,” Thiel said.
The heart 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 house prices go up 50%, and maybe people’s salaries go up, but they don’t go up by 50%,” he said. “So GDP grows, but it’s a huge boon for boomer homeowners and landlords, and it’s a huge hit for the lower middle class and young people who can never get on the housing ladder.”
Thiel warned that this “Georgian real estate catastrophe” is being found in many “Anglosphere countries,” including the United States, Great Britain and Canada.
The rise in home prices in the United States has been nothing short of alarming for the homeless. Over the past five years, the S&P CoreLogic Case-Shiller US National Home Price NSA Index has risen by 45% (2). This indicates that, on average, the value of a single-family home in the United States has nearly doubled in that five-year period.
Although there is reason to believe that growth may be slowing. A Reuters survey of real estate experts suggests that house prices in the United States will rise only 1.4% in 2026 (3). While that increase would be relatively minimal compared to the last few years, it is an increase nonetheless.
Thiel connected the rising prices to inflation, stating, “There’s a way you can talk about inflation in terms of the prices of eggs or groceries, but that’s not such a big expense item, even for lower middle class people. The really big expense item is rent.”
At its core, 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 and the owners and the elderly.”
Thiel is not the only one to raise the alarm. Federal Reserve Chairman Jerome Powell emphasized similar concerns.
“The real housing issue is that we’ve had, and we’re 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 during a press conference in September.
The gap in the housing market is significant. The United States 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 housing prices, high mortgage rates are another major obstacle that prevents many Americans from “getting on the housing ladder,” as Thiel described it.
Mortgage rates remain stubbornly high: set to average 6.28% in 2026, down from 6.32% in 2025, according to the survey.
The US Federal Reserve has been cutting interest rates, and there are hopes that they will continue to do so. However, after the Fed’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 cut in the federal funds rate is going to make much of a difference to people. (5)”
While the Fed’s interest rate decisions are out of your control, there are ways you can take control to secure the best mortgage rate possible. Freddie Mac recommends shopping by getting quotes from three to five lenders to find the best rate (6). Keep in mind that shaving even half a percentage point off a 30-year mortgage can lead 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.
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 the best providers in your area — potentially reducing the time and effort it takes to shop around. After all, like 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 leverage fractional ownership to leverage rental property income. By doing this, you can gain exposure to real estate – without pouring your life savings into an investment property.
Mogul is a real estate investment platform that offers fractional ownership in blue-chip rental properties, giving investors monthly rental income, real-time appreciation and tax benefits – without the need for a hefty down payment or 3 AM tenant calls.
Founded by former Goldman Sachs real estate investors, the team handpicks 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 goes through a verification process, which requires a minimum income of 12% even in declining scenarios. Across the board, the platform has an average annual IRR of 18.8%. Meanwhile, their cash-on-cash yields average between 10 to 12% per annum. Offers often sell out in less than three hours, with investments typically ranging between $15,000 and $40,000 per property.
Every investment is guaranteed by real assets, not dependent 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 fractionalization adds a layer of safety, ensuring a permanent and verifiable record of each share.
Another way to leverage rental income is with crowdfunding platforms like Arrived, which allows you to get into the property 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-proof asset class without the hassle of midnight maintenance calls on 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 toward remote work. But some sectors, such as grocery and retail, were more resilient.
If you have available capital or an existing real estate portfolio, you may consider entering this sector. After all, everyone needs groceries – even in tough times. One way to do this is with First National Realty Partners (FNRP), which can help you access commercial real estate properties anchored in the grocery.
With a minimum investment of $50,000, accredited investors can own a share of properties leased by national brands such as Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to triple net rents, you can invest in these properties without worrying so much about tenant costs cutting into potential income. This means that tenants take care of property taxes, building insurance and common area maintenance — in addition to the base rent.
Even better, FNRP has closed over $2 billion in acquisitions with over $145 million 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.
