[ericmay]

Few issues w.r.t real estate:

  Prices come down because of interest rates which potentially make the mortgage even more expensive than before
  Prices coming down means prices on your current house also go down, so less money available if you wanted to move or "upgrade"
  Prices coming down will correspond with job losses so you might not even be able to buy a place because you are looking for a job
  Unrealistic expectations that a recession will just lower prices while ignoring the structural problems in the housing market such as the effect of higher interest rates on new home construction or the lack of homes for sale as owners locked up lower interest rates in the past

With that being said, this is overly broad and different markets will operate differently. Home prices may crash in Boise (just making something up here) while remaining flat or increasing in a location like Columbus where I live and housing prices haven't skyrocketed in a similar fashion (yet).

I'm often very unfavorable at government market intervention but this may be a time where the government can step in and build "starter homes" at cost. I guess we could see some startups emerge here but for new entrants it appears that regulation and law are the barriers. Different from established home builders where you build a house that costs X and you sell for Y, but if you make the house larger with "nicer" finishes you can build it for x+10% and sell for y+40% and that's the "barrier" moreso than navigating regulatory frameworks.

[lumost]

You're effectively arguing that we need price stability in housing, something that should be a given. Unfortunately we've adopted a policy of price growth in housing which has made it untenable for new buyers. If we could ensure that housing was a stable asset in both directions then we'd generally be in better shape.

I'd suspect that many Nimby issues would go away if people didn't view their house as their retirement. To your point, interest rates are not the only mechanism for this - and direct government construction might be more efficient.