Whom do you blame for high house prices? Nearly half of young Americans are pointing a finger at the government.

Many of those respondents called out the government’s lack of action in boosting housing affordability. 

The survey indicated that 45% blamed state and local governments for current housing prices, while 70% said that the government hasn’t done a good job of making housing affordable.

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“It makes sense, especially following the Great Financial Crisis, that younger Americans are experiencing a sense of fear of missing out when it comes to owning a home, and that they would vent those frustrations toward governments at all levels,” Jeff Taylor, founder and managing director at Mphasis Digital Risk, said in a statement. 

Part of that anger stems from tight consumer-protection rules and restrictions on lenders, the survey said. 

Lenders have strict rules that are set by the government to ensure borrowers are able to repay their debt. These rules were born out of a desire to be more cautious after the subprime mortgage crisis and the so-called Great Recession nearly two decades ago. Poor underwriting practices played a big part in the subprime mortgage crisis, the International Monetary Fund concluded in 2008.

The other side of frustration is with local zoning laws that restrict the kind of housing that is built, the survey found. The U.S. historically has had a preference for single-family homes and land ownership, Robert Dietz, chief economist at the National Association of Home Builders, said in a MarketWatch podcast earlier this year. But building a single-family home means fewer housing units will be created, as compared to building a town house or an apartment.

To be sure, government regulation isn’t the only reason housing has become so costly in the U.S. Market dynamics — high demand and low supply — are also a key factor.

The cost of homeownership has risen sharply over the last two years, as home prices took off, followed by mortgage rates, which have doubled in a brief span, according to data from Freddie Mac
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The median price of an existing home in the U.S. was $388,800 as of April, the National Association of Realtors said. The median price for an existing home was down 1.7% to $388,800 in April as compared with April 2022. That drop was the largest since January 2012, when home prices were 2% from year-earlier levels. 

Hesitance among homeowners to sell is a factor in creating a shortage of houses available for buyers can purchase. The New York Fed estimated that 14 million mortgages were refinanced during the pandemic, and many of those homeowners will find few reasons to swap out a rate that’s below 4% for one of 7%.

Many of these homeowners have also seen their property values appreciate in value over the last few years, and selling could saddle some with a hefty tax bill.

Both of these factors are contributing to a squeeze in supply, which is leading to competition in some parts of the U.S.

And on the demand side there’s noteworthy interest among the millennial generation in purchasing housing. Millennials, born between 1981 and 1996, have overtaken baby boomers to become the largest population cohort in 2019, Freddie Mac said in 2021. “Our research confirms,” said the government-sponsored enterprise, “that millennials [will be] a major force in the home-buying and mortgage business for years to come.”