A Full-Court Press on the Housing Affordability Crisis
- NAHB continues to work tirelessly to enact solutions to the growing housing affordability crisis and to keep housing front and center among policymakers and the media.
- In a sign of the clout of NAHB, we have participated in several high-level policy venues over the past several weeks.
- On Sept. 21, NAHB CEO Jerry Howard engaged in a White House meeting on housing where he urged the administration to focus on helping to ease building material supply chain shortages that are resulting in housing construction delays and higher home building costs.
- Howard also asked the White House to make it a priority to ensure sufficient liquidity for the housing market and to eliminate unnecessary regulations that slow the home building process and raise housing costs for home buyers and renters.
- NAHB First Vice Chairman Alicia Huey touched on similar themes when she participated in a New Democratic Coalition Housing Roundtable on Sept. 15, including urging lawmakers to ensure that vocational training opportunities stand on the same footing as a four-year college path.
- And NAHB Chairman Jerry Konter testified before Congress on July 20 and urged lawmakers to act on several fronts to resolve the housing crisis.
- Many of you are also aware of a new supply chain issue – the growing lack of transformers.
In an effort spearheaded by NAHB, we sent a joint letter to President Biden last week along with three other organizations (Associated Builders and Contractors, the Association of General Contractors and the Independent Electrical Contractors) reiterating our concerns about the lack of availability of transformers and other components.
We have also engaged the Commerce Department on this issue and we are asking the White House to convene a summit with interested stakeholders to find solutions to these problems.
Our efforts on the supply-side front are showing results. Lawmakers have reached out to the Biden administration urging it to prioritize lumber trade and to reduce housing costs.
Lawmakers are also taking to the House floor to urge the administration to address the housing affordability crisis by prioritizing lumber and building material prices.
And thanks to NAHB’s tireless efforts on the tariff front, the Commerce Department moved in August to slash tariffs on Canadian lumber imports into the U.S. by more than half – from 17.99% to 8.59%.
While we have seen progress, NAHB and our powerful grassroots continue to hammer home the message to Washington policymakers that much more needs to be done to improve housing affordability in this high-inflation environment.
NAHB is determined to keep the pressure on the Biden administration and Congress and is working 24-7 to resolve these critical housing affordability issues that are affecting all our members across the country.
Housing Recession Deepens
- The housing recession continues to deepen.
- Builder sentiment has fallen for 10 consecutive months, single-family production is running at a weakened pace due to elevated mortgage rates and high construction costs, and existing home sales have been down for eight straight months.
- All of these factors, coupled with high inflation, low existing inventory and elevated home prices caused housing affordability to fall to its lowest level since the Great Recession in the second quarter of 2022. Just 42.8% of new and existing homes sold were affordable to a typical family, according to the NAHB/Wells Fargo Housing Opportunity Index.
- And in a move that will add further headwinds to an already down housing market, the Federal Reserve on Sept. 21 posted its third straight rate hike of 75 basis points to the federal funds rate. As of early October, mortgage rates were running near 7%, the highest level since 2007.
- Since housing is a leading indicator of economic conditions and there is a policy lag involved with monetary policy, NAHB is urging the Fed to take careful note of the worsening housing market moving forward.
- NAHB is forecasting that 2022 will be the first year since 2011 to see single-family starts decline. After additional declines in 2023, single-family construction is expected to rebound in 2024 as interest rates normalize