Government Efforts to Address Housing Affordability

Both the Senate and President Trump have taken action recently to address the high cost of housing. But many different economic realities are colliding in the housing market. There's an urgency in Washington right now to do something about the cost of housing. Since 2000, the average home value in the U.S. has more than doubled, even quadrupling in some cities. Incomes have not kept up. Both Congress and the White House are trying to help. So it's almost spring, and that's typically the start of homebuying season. What does the housing market look like right now? Well, you know, the sun is staying up later. Birds are coming back. The pollen has effectively coated my car in Alabama. It should be a big time for homebuying. But instead, the sentiment is - ugh. That is because we are short millions of homes, based on what the need is in this country, and that drives up prices. Homebuilders could help with that, but they also have those lingering winter blues. They are not planning on building a lot of new homes 'cause the cost of borrowing is high, and so are materials and labor. So what is the government doing about it? Well, President Trump on Friday signed two executive orders on this, both of them basically turning to deregulation as a solution. The first is about loosening up mortgage rules, like making it easier for smaller banks to give customers a loan. The idea is more lenders will mean more competition and lower rates. The second is deregulation on home construction. One thing that drives up construction costs is meeting standards for things like energy efficiency and waiting on approvals. President Trump's order tells all sorts of agencies to look for rules to either streamline or just get rid of them to speed things up. And she said, yeah, cutting regulations can make the sticker price of homes cheaper. By cutting those corners, are you essentially, you know, saddling a homeowner with a home that's not necessarily going to be the most comfortable to live in, where you might have problems down the road and where your sort of everyday expenses of homeownership are higher than they might necessarily need to be? So this deregulation could have negative consequences in the long run. So what about in Congress? What's happening there? Yeah. The Senate just approved the largest housing bill in decades, and they did so with huge bipartisan support. The bill has more than 40 different ideas, programs and changes to old rules. But the core of it is pretty similar to what Trump's orders are trying to do - encourage more building through things like deregulation and grants. So it sounds like a lot is happening in Congress and at the White House, but will all of that make housing more affordable? Well, they could make a dent here. But ultimately, anything coming from Washington is going to be limited. The reason that Senate bill is so sprawling is because it's really a lot of different nudges for state and local governments. They have a much bigger influence on home construction through things like building codes and zoning laws. So what about mortgage rates? I know they were going down. Well, that was before the war with Iran. I mean, just about two weeks ago, mortgage rates fell below 6% for the first time in years. But they also quickly rose back up because of all the uncertainty in the economy, primarily because of the war with Iran. And so lawmakers can propose 40 different measures, all meant to improve affordability, and the president can sign executive orders to try and help. But this war that he launched has made it a scary time to lend money, and that makes it more expensive to get a mortgage and buy a house.