By people paying for houses they actually want to live in?

Real estate as "investment" is not helping anything here; it hurts home availability, first because prospective homeowners have to compete with capital that just wants to use those as store of value/for rentseeking (driving up demand/prices) and secondly because this creates incentives against building more houses (because that hurts those real estate "investors").

Construction companies can still turn a profit building and selling them. The idea is that houses should be depreciating assets, like cars. If houses are appreciating in value it means you're not building enough of them.