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I see the narrative a lot that it's caused by people holding onto housing as an investment, and that might be true, but I'm unconvinced it's anything more than a supply problem. No doubt what you described about people reluctant to sell in the current market is happening, but if a house is truly only worth $150k, it should sell for $150k, and the person trying to sell it for $400k will keep dropping the price until it reaches what it's worth as the owner gets impatient and has to pay upkeep on it in the meantime. There are stats for how many homes are sitting vacant, but often times I understand that they capture a snapshot in time of when those homes are between owners or tenants, and what was vacant at snapshot 1 may be a totally different sample than what's vacant at snapshot 2, even though the number of vacant homes remains similar.

Here's another thing that may be having an impact, but I have no idea how large: a lot of baby boomers are still living in their "forever homes" that they bought decades ago for families that were much larger before their children moved out. So you have a lot of people with proportionally too much house for what they actually need that, to make this topic a bit more morbid, will start dying off in greater numbers as the years go on and freeing up that housing inventory for families that would need that much space.