It used to be said that the sun never set on the British Empire, so far-flung were its possessions. Britain has long since retreated from most of those territories, most recently, and controversially, in its attempt to relinquish control of the Chagos Islands. Yet even as it sheds physical dominion, Britain appears increasingly eager to export something else: its laws and regulations. 

In that project, it is joined enthusiastically by its former partners in the European Union. If the Old World has one major export left, it is bureaucracy.

The most obvious current target is X, Elon Musk’s platform, and its Grok AI tool. Some users of questionable taste quickly discovered that Grok could be used to generate deepfake images of celebrities in revealing attire. More seriously, it was alleged that the technology had been used to generate sexualized images of children. In response, last month the UK’s communications regulator, Ofcom, opened a formal investigation under the Online Safety Act, citing potential failures to prevent illegal content. The possible penalties are severe, ranging from multi-million-pound fines, based on the company’s global revenue, to a complete ban on the platform in the UK.

Senior British officials were quick to escalate the rhetoric. Prime Minister Keir Starmer and Technology Secretary Liz Kendall publicly condemned X and emphasized that all options, including nationwide blocking, were on the table. The message was unmistakable; compliance would be enforced, one way or another.

Two days later, X announced new restrictions to prevent Grok from editing images of real people into revealing scenarios and to introduce geoblocking in jurisdictions where such content is illegal. Ofcom described these changes as “welcome” but insufficient, insisting its investigation would continue. Meanwhile, pressure spread outward. Other governments announced restrictions, and the European Commission expanded its own probes under the Digital Services Act. What began as a British enforcement action quickly morphed into coordinated global pressure, effectively pushing X toward worldwide policy changes.

This is the crucial point. British regulators were not merely seeking compliance for British users. They were pressing for changes to X’s global policies and technical architecture to govern speech and expression far beyond the UK’s borders. What might initially have been framed as a failure to impose sensible safeguards on a powerful new tool has become a test case for whether regulators in one jurisdiction can dictate technological limits everywhere else.

This pattern is not new. Ofcom has already attempted to extend its reach directly into the United States, brushing aside the constitutional protections afforded to Americans. Since the Online Safety Act came into force in 2025, Ofcom has adopted an aggressively expansive interpretation of its authority, asserting that any online service “with links to the UK,” meaning merely accessible to UK users and deemed to pose “risks” to them, must comply with detailed duties to assess, mitigate, and report on illegal harms. Services provided entirely from abroad are explicitly deemed “in scope” if they meet these criteria.

The flashpoints have been 4chan and Kiwi Farms, two US-based forums notorious for unmoderated speech and even harassment campaigns. In mid-2025, Ofcom initiated investigations into both for failing to respond to statutory information requests and for failing to complete the required risk assessments. It ultimately issued a confirmation decision against 4chan, imposing a £20,000 fine plus daily penalties for continued non-compliance, despite the site having no physical presence, staff, or infrastructure in the UK.

Rather than comply, the operators of both sites filed suit in US federal court, arguing that Ofcom’s actions violate the First Amendment and that the regulator lacks jurisdiction to enforce British law against American companies. The litigation frames the dispute starkly: whether a foreign regulator may, through regulatory pressure, compel changes to lawful American speech.

That question has now spilled into US politics. Senior American officials have criticized Ofcom’s posture as an extraterritorial threat to free speech, and at least one member of Congress has threatened retaliatory legislation. What Britain views as online safety increasingly appears, from across the Atlantic, to be regulatory imperialism.

Speech is merely the most visible example. Europe has long sought to impose its environmental priorities on both developed and developing countries alike, a phenomenon I once labeled “eco-imperialism.” The latest iteration is the EU’s deforestation regulation, scheduled to take effect later this year. Exporters of products such as timber and beef must now prove, to the EU’s satisfaction, that their supply chains have not contributed to deforestation.

For American producers, this is less about forests than paperwork. As the Farm Bureau has noted, the rule functions as a non-tariff barrier, particularly for producers without vertically integrated supply chains. Native American tribes reliant on timber exports have gone further, accusing Brussels of a renewed form of colonialism.

Financial regulation provides another illustration. Through a patchwork of directives and equivalence determinations, the EU increasingly conditions market access on conformity with its regulatory preferences. Non-EU jurisdictions are pressured to align their rules not through treaties, but through the sheer leverage of access to Europe’s markets, the so-called Brussels Effect.

Even Europe’s revived Blocking Statute, originally intended to counter US extraterritorial sanctions, underscores the contradiction. Europe insists on defending its own regulatory autonomy while simultaneously seeking to universalize its rules abroad.

None of this should be surprising. Administrative overreach is not generally a moral failure but an institutional one. Regulators operate under mandates that are deliberately broad, politically insulated, and difficult to measure. Their incentives are asymmetric; visible failure is punished, while over-caution and expansion rarely are (indeed, they are often rewarded). In such an environment, discretion naturally displaces rules. This, in turn, empowers the production of bulletins, circulars, and even blog posts that have the effect of law, something my colleague Wayne Crews calls “regulatory dark matter.”

When regulators move beyond enforcing clear, predictable rules and instead attempt to manage outcomes like “safety,” “harm,” and “fairness,” they substitute their own judgment for dispersed social knowledge. The claim that complex systems can be centrally overseen within a nation, let alone across borders, rests on an exaggerated confidence in regulatory omniscience and a systematic undervaluation of unintended consequences.

As this tendency is reinforced rather than checked, agencies gravitate toward peer approval rather than public accountability, and therefore toward international coordination rather than domestic consent. Jurisdiction follows the reach of the system instead of democratic legitimacy. Borders become inconveniences, and constitutional limits become parochial relics. Trial by jury, the crown jewel of common law? An inconvenience.

These developments also reflect a deeper shift in governance. In Britain, Parliament has not merely delegated power to regulators; it has largely abandoned meaningful oversight of them. Ministers disclaim responsibility in the name of independence, while courts typically review only whether regulators followed proper procedure, not whether their decisions were wise or proportionate. In the EU, this technocratic design was largely intentional from the start, with the Commission enjoying extraordinary agenda-setting power and steadily expanding its reach since Maastricht.

The result is an administrative order increasingly detached from democratic constraint. As Britain and Europe struggle economically, particularly in comparison to the United States, the temptation is not to reform inward, but to regulate outward. If growth cannot be revived at home, regulation can at least be exported abroad.

Yet Europe’s recent clash with America over Greenland has exposed much of the continent’s weakness. While the Commission may seek to demand subservience from American tech companies, those companies have the capability to turn off the lights — literally. The smothering of Europe’s technological innovation under its regulatory blanket means it has nothing with which to replace American know-how. Britain’s failure to break fully from the European regulatory mindset after Brexit means it is stuck in the mid-Atlantic, regulating Americans while still attempting to stay on America’s good side. That game may soon be up.

The British Empire once projected power by force. Today, the Old World tries to extend its reach not with arms, but compliance. But bureaucracy, like the empire, cannot resist the setting sun.

Conversations around artificial intelligence have dominated the news cycle and culture at large for the better part of three years, with concerns becoming amplified more and more as time has gone on. These concerns focus mainly on regulation, safety, and environmental impacts.

Many policymakers argue that the scale of “Big Tech” threatens innovation, a claim often more motivated by political incentives than true economic analysis. More helpful than anecdotal assumptions, however, is the work of two twentieth-century Austrian economists, F.A. Hayek and Joseph Schumpeter. It seems the real threats to innovation may be less about Big Tech and more akin to bureaucratization and central planning by regulators. While critics fear capitalism’s excesses, both Hayek and Schumpeter warn that overreaction can stifle innovation. Overall, the two thinkers demonstrate that the danger is not “unregulated capitalism,” but the merger of large corporate bureaucracy with state planning impulses.

As Schumpeter describes in his magnum opus, Capitalism, Socialism, and Democracy, the process of capitalism is a complex one. He describes the phenomenon of creative destruction, where an entrepreneur innovates a particular good or service. This eventually erodes the very entrepreneurial ambition that created the product, replaced instead by a large bureaucratized firm, drunk on its own success and unable to innovate with the same veracity as before, until the next innovative competitor comes along and the cycle continues. This is evident in Big Tech: Amazon, Apple, and Meta are no longer scrappy startups but what Schumpeter would call “perfectly bureaucratized industrial units.”  The innovation that led to their initial success becomes routine inside R&D departments, layers of middle management, and the firm ultimately becomes technocratic. This erodes the risk taking that led to the innovation in the first place, and risk taking becomes less commonplace. The public then interprets this slowdown as a “market failure,” opening the door to the appeal of government involvement. 

This slowdown is happening in the midst of the AI revolution, with massive tech company layoffs. The mantra of ‘move fast and break things’ has given way to a crisis of middle management, most visibly in Elon Musk’s decision to lay off over half of Twitter’s workforce. These firms are not “monopolies” preventing competition, as much as they are bureaucratic giants facing internal stagnation, an ironic product of their own entrepreneurial success. 

If Schumpeter shows why big firms ossify, Hayek shows why regulators cannot fix the stagnation, and often make it worse. Policymakers always assume they can design rules for “safe AI,” “fair algorithms,” or something of the like, and appeal to a populous afraid of change and often experiencing paralysis around technological development. Such regulatory interest may seem like “common sense,” but they each require information that no central authority can gather, even with hearings, white papers, and expert panels.

Hayek dubs this phenomenon “the knowledge problem,” a commonality in his critique of socialism and the “fatal conceit” of central planning. Hayek famously said, “The curious task of economics is to show men how little they know about what they imagine they can design.” The best opportunity for AI progress is decentralized, happening in small labs, and promoting innovation and development as much as possible. The “best” AI architectures, training data, or safety protocols cannot be known ahead of time, because the extent of the technology has yet to be explored. Regulation attempts to “freeze” innovation into one approved path, which amplifies the sclerosis Schumpeter describes and stifles incentives to innovate. There are several notable examples of these bad regulations, including the EU’s recent AI act which prohibits certain model categories and imposes heavy ex ante compliance. With regulatory capture comes tremendous barriers to entry for smaller firms. This means only large tech companies can comply with the regulation, entrenching the narratives around Big Tech by preventing new innovators from coming to the table. The more policymakers decide the future of innovation, the less room innovators have to discover what actually works.

With both of Schumpeter and Hayek’s concerns put together, managerial bureaucracy merges with managerial government regulation, forming what Schumpeter calls “the heir apparent to capitalism,” a hybrid of corporate technocracy and state regulation, akin somewhat to China’s current economic system. This results in lower entrepreneurial entry, less experimentation, higher regulatory moats, more political dependence of firms, a decline of economic freedom, and a decrease in innovation, already seen in non-AI sectors. The threat is not “monopoly power,” but policy-induced stagnation. Big Tech, combined with big government, creates a self-reinforcing cycle of bureaucratization.  

In order to prevent this vicious cycle of bureaucracy, there are Hayekeian improvements that could prove helpful, including reducing regulatory barriers that privilege incumbents, and allowing open entry, open-source experimentation, and competitive discovery. A system of stable rules rather than discretionary regulatory action prevents cronyism and the kind of corporate welfare involved with regulation.

From a Schumpeterian standpoint, solutions are less direct. Generally encouraging entrepreneurship—through lower compliance costs and reduced barriers to entry—fosters innovation and a more competitive market, which better serves consumers. At the end of the day, creative destruction should be recognized as a healthy feature of economic life, not a pathological one.

If policymakers treat Big Tech’s bureaucratic stagnation as a justification for more bureaucracy, the outcome will be a self-fulfilling Schumpeterian slide into managerial socialism. The path forward is not to plan innovation, but to let a new wave of entrepreneurs challenge bureaucratic giants. Big Tech does not need to be centrally managed, and AI does not need a planner. 

What it needs is competition, openness, and the freedom to discover what no regulator or executive committee can foresee. Hayek and Schumpeter help us see that innovation survives only when we defend the institutions that make creative destruction possible.

Markets have long been accused of lacking morality. On February 10, the Vatican decided to supply one. The Institute for the Works of Religion (IOR), commonly known as the Vatican Bank, partnered with Morningstar to launch two stock market indices designed to guide Catholic investors. The Morningstar IOR US Catholic Principles Index and the Morningstar IOR Eurozone Catholic Principles Index are “built following market best practices and in accordance with Catholic ethical criteria, and intended to serve as a global reference point for Catholic investing.” 

According to reporting by Business Insider, the US index is heavily anchored, with more than twenty percent of the portfolio concentrated in firms such as Meta, Apple, Tesla and Alphabet. The European index remains more geographically and sectorally diverse, with holdings including ASML, Santander, Hermes and Deutsche Telekom. 

The move marks a notable shift in tone from just over a decade earlier. In 2014 Pope Francis openly criticized financial markets and speculation. “It is increasingly intolerable that financial markets are shaping the destiny of peoples rather than serving their needs, or that the few derive immense wealth from financial speculation while the many are deeply burdened by the consequences.” 

The Vatican is not the first religious institution to enter the world of faith-based investing. As MoneyWeek notes, smaller religiously oriented products already exist, including the FIS Christian Stock Fund ETF (ticker: PRAY) and Global X’s S&P 500 Christian Values ETF (ticker: CATH). Still, it is striking to see one of the world’s oldest moral authorities step directly into modern capital markets, no longer condemning them from the sidelines, but attempting to navigate them.

This raises a more basic question: what is the stock market actually for? However noble the intention, the organizing principle of equity markets is profit, pricing risk, aggregating information, and allocating capital accordingly.

That uncomfortable truth was captured in the 1980s by Gordon Gekko in the film Wall Street. “Greed, for lack of a better word, is good. Greed is right. Greed works.” The sentiment was never seen as a sermon on virtue. It was a provocation about incentives, the truth about how markets discipline behavior not through moral judgment, but through the signals of profit and loss.

The most prominent episode in which the Catholic Church became directly entangled with financial mechanisms occurred during the construction of St. Peter’s Basilica, which was financed in part through the sale of indulgences in the fifteenth and sixteenth centuries. That episode blurred moral authority and monetary exchange in the service of a concrete institutional project, with consequences that extended well beyond Rome. Scripture itself draws a clear boundary between spiritual and worldly domains with the passage Matthew 22:21: “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s.” 

Ironically, the Vatican Bank itself operates for profit. In 2024, it reported net income of €32 million (about $37.6 million), up seven percent from the prior year. Alongside this commercial reality, IOR’s investment policy for the new indices is explicitly moralized. The framework prioritizes the sanctity and respect for human life, environmental protection, and combating addictions, supplemented by an exclusion grid derived from social responsibility and sustainability criteria aligned with the United Nations Global Compact.

In practice, this approach closely mirrors Environmental, Social, and Governance investing. ESG frameworks place pressure on firms, and now religious institutions, to become vehicles for social objectives rather than providers of goods and services. While such an approach may appear more fitting for a moral authority than for a corporation, it still falls short of the profit-driven incentives that underpin capitalism’s effectiveness. Historically, broad-based capitalist growth has done more to improve human welfare than ESG programs have demonstrably achieved. As AIER contributor Russell Greene notes, “When it comes to results, the economic enlightenment enabled 128,000 individuals to escape abject poverty every single day. In contrast, it’s not clear if the ESG movement has accomplished anything of note.” 

Simple market participation such as investing in a broad benchmark like the S&P 500, with its long record and transparent construction, would have sufficed. For example, placing $1,000 into the S&P 500 twenty years ago would have quadrupled in value, “The index has grown by 448.7% since 2005, when you made your initial investment. So, your original $1,000 would now be worth $4,487, minus inflation adjustments.”

Writing in the same era that Gordon Gekko entered popular culture, economist Milton Friedman argued that the social responsibility of business is to increase its profits, not because profit is virtuous, but because it is accountable. 

“Only people have responsibilities,” Friedman wrote. “A corporation is an artificial person and in this sense may have artificial responsibilities, but ‘business’ as a whole cannot be said to have responsibilities, even in this vague sense.”

Given that the IOR operates for profit and has now entered public capital markets, the Vatican Bank would do well to remember that markets discipline behavior through loss and reward, not moral proclamation. Investors may act on conscience, but when markets are asked to serve moral ends, whether from the UN or the Vatican, price signals are replaced with certification and branding. 

Profit is not a moral failure; pretending it can be replaced is. Markets coordinate human activity through incentives, not intentions. Asking them to do otherwise misunderstands both economics and morality.

New York City’s new mayor Zohran Mamdani made housing affordability a big part of his campaign. On his first day in office, he signed three executive orders related to housing policy, and his subsequent housing ideas have mostly involved more regulation or more taxpayer spending. Mamdani may mean well, but government cannot fix the Big Apple’s housing problem.

Mamdani’s most recent setback is related to the City Fighting Homelessness and Eviction Prevention Supplement program, or CityFHEPS. Roughly 60,000 households participate in the voucher program, and its costs have exploded in recent years, rising from $176 million in 2019 to a projected $1.2 billion in fiscal year 2025. Mamdani promised to expand CityFHEPS eligibility but recently said his administration needs more time to evaluate its options given the city’s bleak budget outlook. But time will not solve Mamdani’s money problem.

New York City is facing a $2.2 billion budget deficit, and in addition to his housing dreams, Mamdani recently announced a plan to provide taxpayer-funded childcare for two-year-olds at a projected cost of $6 billion annually. The truth is that New York City does not have the money to provide the housing it needs.

The only way to make housing truly affordable is to build a lot more of it in places people want to live. New York City cannot do this without the private sector. One recent estimate of New York City’s housing shortfall finds it needs 473,000 more units by 2032. The average cost to build an affordable unit in big cities is around $500,000 per unit. Multiplying the two numbers together equals $236.5 billion, or $34 billion per year over seven years. New York City raised $81 billion in tax revenue in 2025, meaning it would take 42 percent of all the city’s annual tax revenue to build the housing it needs if it wants to go it alone.

Mamdani’s political philosophy will be his undoing. As a self-identified democratic socialist supported by the Democratic Socialists of America (DSA), he sees little use for private developers. The DSA wants housing to be expropriated from its current owners and given to the “working class.” They believe tenants should control housing. As they put it, “Social housing does not offer an equal seat at the table to developers, investors, or city councilors. Social housing prioritizes and makes real the collective will of tenants.” While their long-term vision is an end to “commodified housing”, in the short term they want state-provided and publicly owned free housing available to anyone.

Mamdani seems committed to realizing the DSA’s vision. On his first day in office, he revitalized the Mayor’s Office to Protect Tenants and named Cea Weaver as its director. Weaver has come under fire for some past statements about treating private property as a “collective good” and calling homeownership “a weapon of white supremacy”. While these statements are alarming to people like me who value property rights and the prosperity they generate, they are consistent with how the DSA views housing.

This way of thinking exemplifies Mamdani’s problem. Fewer people will want to build or manage rental housing if the city makes it too hard to remove unruly tenants or those who do not pay. The landlords who do stick around will charge higher prices. New York City already has some of the strictest tenant protections in the country, and these laws contribute to the city’s high housing costs. One study analyzing tenant protections finds that stricter protections reduce the supply of rental housing and increase an area’s median rent by six percent. Another study also finds that good-cause or just-cause eviction laws increase rents by six percent to seven percent, with lower-income renters experiencing larger rent increases.

Raising taxes to generate more revenue is always an option for socialists like Mamdani, but his taxing power is constrained by people’s ability to move. From 2020 to 2022, over $38 billion of adjusted gross income and 485,000 people left New York state. Research shows people, especially wealthy people, move when taxes get too high. Dallas mayor Eric Johnson is already predicting financial firms would flee New York City if Mamdani raises taxes.

Mamdani and his DSA comrades may not like working with private developers, but if he wants to make housing more affordable in New York City he does not have much of a choice. And if he is open-minded, he might learn something, too: Competitive markets often generate amazing outcomes for all involved. New York City’s housing crisis is fixable, but only if Mamdani lets the private sector do its thing.

Kevin Hassett’s recent call to “discipline” Federal Reserve researchers over a New York Fed study on tariffs is not just a political swipe. It is a troubling signal about the growing willingness of policymakers to delegitimize economic analysis they find inconvenient or unsupportive. 

Disagreement with research is a normal, healthy part of scientific inquiry. But attempts to intimidate researchers because their findings conflict with a preferred narrative undermine the credibility of policymaking itself. At a moment when trade policy is already generating uncertainty across markets, this kind of rhetoric risks turning economic debate into a loyalty test rather than an evidence-based process.

The New York Fed study in question found that US firms and consumers absorbed the vast majority of tariff costs in 2025, with importers bearing roughly 94 percent of the burden early in the year and still around 86 percent by November. These findings are not outliers. Similar conclusions have been reached by researchers at the Kiel Institute, Harvard University, Yale Budget Lab, and the Congressional Budget Office, all of which point to high pass-through of tariffs into US import prices. 

The basic economic mechanism is well understood: when tariffs are imposed, domestic buyers often face higher costs because foreign exporters rarely slash prices enough to offset the duties. Hassett may disagree with the methodology or emphasis, but calling the research “an embarrassment” that would fail a first-semester economics course dismisses a body of evidence that aligns with decades of empirical trade literature.

Hassett’s principal criticism — that the study focused on prices rather than quantities —  deserves debate, not disciplinary threats. Economists have long examined tariff incidence through price movements precisely because they reveal who ultimately pays. Quantity adjustments, wage effects, and currency adjustments can matter, but they are separate channels that require rigorous modeling and time to evaluate. Simply asserting that tariffs will raise domestic wages or improve consumer welfare does not invalidate evidence showing that price pass-throughs are substantial. Policy analysis requires grappling with tradeoffs, not declaring victory by ignoring uncomfortable metrics.

More concerning is the broader context. The administration has repeatedly attacked institutions and analysts whose conclusions diverge from its messaging, from pressuring private sector economists to dismissing unfavorable labor statistics. 

Federal Reserve officials, including Minneapolis Fed President Neel Kashkari, have warned that such attacks risk compromising the central bank’s independence, a cornerstone of credible monetary policy. Although the Federal Reserve’s current credibility may be open to debate, deliberately undermining it further is imprudent. A strength of the Federal Reserve system lies in its decentralized research structure, where district banks produce analysis that does not necessarily reflect official policy positions. Demanding punishment for economists who publish data-driven findings erodes that institutional integrity and sends a chilling message to researchers across the policy landscape.

There is nothing wrong with policymakers arguing that tariffs could produce broader strategic benefits, whether through reshoring, geopolitical leverage, or sectoral wage gains. Those claims should be debated openly, supported by models and evidence, and tested against real-world outcomes. But dismissing empirical research as “partisan” simply because it challenges a policy narrative turns economic discourse into political theater where bully pulpits have the advantage. 

If policymakers want to persuade markets and the public, they should present competing analyses. Hassett could have assailed the Fed study on the basis of tradeoffs, methodological assumptions, or competing interpretations of the data, rather than resorting to vacant dismissal.

Ignoring the economic effects of tariffs in the face of strong empirical evidence risks veering into a form of modern economic Lysenkoism where political loyalty takes precedence over analysis and communal scientific review. (Trofim Lysenko was a Soviet agronomist who rejected established genetic science, instead promoting politically-favored agricultural theories that aligned with Stalinist ideology. Under his influence, dissenting scientists were silenced, imprisoned, or purged, illustrating how injecting ideology into research handily squelches scientific progress.) 

The issue here is not whether tariffs are good or bad policy, although the administration has already conceded the harms associated with them. It is whether economic research can proceed without fear of reprisal when its conclusions prove inconvenient. Undermining that principle will surely generate a measure of sycophantic political applause, but carries long-term costs — not only for American economic health, but for scientific inquiry itself.

Despite what you’ve heard, first time homebuyers are not getting dramatically older.

Statistics are like hot dogs — often juicy but with sometimes questionable ingredients. A recent example is a story racing around the country: first-time homebuyers’ median age is 40 this year, versus just 28 years old in 1991. This alarming trend was explored in a November 6 New York Times article, citing survey data from the National Association of Realtors (NAR). 

But I fell into a trap of my own making, by ingesting a “wow” statistic that reinforced my own experience —  I bought my first house in 1991 at age 29. Now I’m hearing this stat everywhere, in news stories and recent conferences I’ve attended. Statistics like this go viral, by simultaneously carrying “factual weight” and yet stirring emotions. 

Yet the statistic, as compelling as it seems, is likely wrong. Housing economists Edward J. Pinto and Joseph S. Tracy at the American Enterprise Institute (AEI) have recently reported why. The two delved into the less-than-appetizing ways the NAR statistic was created. In July 2025, the NAR team sent out 173,250 surveys with 120 questions to answer online. 

Only 6,103 people bothered to answer, a response rate of 3.5 percent. Only 1,281 of that group were first-time homebuyers. 

Not only that, but the AEI team found that those under 35 were under-represented by 17 percent and those aged 45 to 74 were over-represented by 18 percentage points. 

The NAR economists claim their statistics have ninety-five percent confidence, plus or minus 1.25 percent, but statistical confidence for representing a US population of around 86 million homeowners collapses when the sample is no longer random. Fancy weighting techniques may give an aura of fixing the problem, but rely on subjective guesswork and hard-to-track biases. 

Pinto and Tracy at AEI instead used the New York Federal Reserve Bank Consumer Credit Panel (CCP), which uses a five-percent random sample of all credit reports tied to a Social Security number, and provides borrower age and home buying history.   

And guess what they found? The median age of the first-time homebuyer is approximately 33 years old — not 40 — and has been steady between 2001 and today. Research by The Cato Institute using the US Census Bureau’s American Housing Survey also “casts doubt” on the NAR data, revealing results similar to those reported by AEI researchers. 

The incorrect NAR fact nugget might rapidly dissolve if it didn’t carry so much emotional resonance with those who feel the housing market is “unfair.” But here’s the deeper problem: when a statistic feels true, because it fits in our narrative of how the world works, its power can rapidly sway public policies in the wrong direction. 

What Pinto and other housing experts agree upon (including the NAR economists) is a widespread housing affordability problem, but the larger lesson is that it is impacting people across all ages. Thanks to zoning restrictions on housing density and other challenges, we’re simply not building enough homes. 

What’s more, we make it very difficult for many to purchase homes in less-affluent areas, by making so-called “small dollar mortgages” less profitable for banks to issue. Dodd-Frank banking regulations in the wake of the 2008 Great Recession vastly increased the overhead for issuing these loans, resulting in a rapid drop in mortgage access at the lower end of the market, as The Wall Street Journal has previously reported.

My research with colleagues at New America shows that millions of inexpensive homes exist in the United States, but the financing is unavailable for many families. This leads to falling homeownership rates, and in some cases, property values. Only 23 percent of homes that cost below $100,000 (including condos) were purchased with a mortgage loan, according to a 2020 Urban Institute study. Cash buyers made up the rest.

Community banks, which are more likely to serve these customers, are particularly hard hit by the Dodd-Frank banking regulations. Since 2010 we have lost over 3,600 community banks, “a reduction of over 45 percent,”  according to Treasury Secretary Scott Bessent’s remarks at a conference in October 2025. 

In other words, if we want to concentrate on improving homeownership across all ages, we need to base our policies on statistics that are built upon rigorous methodological foundations. Otherwise, repeating an appetizing but incorrect statistic around first-time homeownership could lead to chronic economic heartburn.