When more people are being priced out of a market than new housing units are added, then yeah they do need to be cheaper to make housing more available. The net result is more stratification, not less.
Ask anyone how to make cheap housing though. No one has a convincing answer. I'm convinced that it's the right question.
Housing becomes cheaper when supply outstrips demand. That is really all there is to it. If there is induced demand due to new housing being built, you just need... more housing.
A U.S. default would spike interest rates, crash bond markets, trigger a credit freeze, and destroy consumer confidence. Mortgages would become unaffordable. Mass foreclosures and job losses would crush demand. Asset fire sales would follow. Housing prices would collapse.
This would also reshuffle assets, so speculators and highly leveraged people would be punished instead of being rewarded.
It will also cleanup the situation for future generations so kids won't have to be under extreme debt to pay back in some way to government, because the older people lived above their means.
The dilemma is you can’t make new housing cheap because if the price falls too much it becomes unprofitable to build and you don’t get new supply.
My city is currently facing this where the interest rate hikes, build tax hikes and falling prices have created a perfect storm of vastly reduced housing starts.
There’s not a lot of confusion about how to build cheaper.
Build less and worse per unit. Share foundations, roofs, walls, and common areas. Build less square footage per unit. Build less fancy per square foot (cheaper kitchens and baths). Use all standard materials and finishes. Install low-end appliances and HVAC. Everything cookie-cutter; no per-unit changes. Use less land per unit (and maybe less expensive land overall). Have no private outdoor space (or just a tiny balcony).
That’s not well aligned to how to maximize profits from a given unit though (fairly obviously and by intentional design).
This does appear to be an application of Goodhart’s Law (when a measure becomes a target, it ceases to be a good measure). Affordable housing is neat but it implicitly encourages infinite housing be built and does nothing to address employment and crazy down payment requirements (especially for those who could otherwise pay the mortgage!).
Ask anyone how to make cheap housing though. No one has a convincing answer. I'm convinced that it's the right question.