> 1. People have mortgages with very low interest rates. If they sell the home, they give up that cheap mortgage for a much higher mortgage interest rate with the next home. So, they stay.

This may be true only in the US. In Canada, for example, the maximum term a mortgage rate is fixed for is 5 years, after which you have to "renew" your mortgage and renegotiate the rate. So a lot of people are already being forced into higher interest mortgages here.

With regard to (1), I would have to agree, though I think this is only the case in the US?

For (2), absolutely. Tax advantages play their part (adding to investment demand relative to other investment options). Is it not also the case that interest payments on a residential mortgage are tax deductible in the US?

Another cause: people live until an older age.

> 2. The capital gains tax exemption of $500,000 has not risen with inflation.

I wish there were a $500k capital gains exemption for turning my ETFs into a house.

Yet another way in which real estate receives massive privilege.