Jerry Konter, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Ga., today issued the following statement after the Federal Reserve moved to raise the federal funds rate by 75 basis points for the third straight time:
“While we appreciate the enormous pressure the Federal Reserve is under to control inflation, the increasingly aggressive monetary policy from the central bank threatens to bring the housing sector to its knees, with unintended consequences to the overall economy. Before the Fed’s latest move, the housing market was already in a recession, with almost all housing indicators showing weakness, including housing starts, permits and sales. Unlike other bouts of high inflation, affordability challenges for prospective buyers and renters are largely due to supply-chain bottlenecks and other supply-side factors that have raised the cost of goods across the spectrum.
“Aggressively focusing on raising interest rates in lieu of fixing our supply-chains could do catastrophic harm to an already ailing housing market and prove to be a counterproductive move that will do more harm than good to the overall economy. We urge the Fed and, in particular, other state, local and national policymakers in charge of regulatory and other fiscal policies to take these factors into consideration and to move in a more prudent manner moving forward to protect access to homeownership and enable supply of affordable rental housing.”