Senators Call To Increase Housing Supply As Affordability Plummets | Eastern NC Now

    Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.

    Democratic and Republican members of the Senate Banking Committee drew attention on Thursday to the effect of low housing supply on prices.

    Labor shortages and supply chain bottlenecks induced by worldwide lockdown mandates raised input costs and thereby increased housing inventory shortfalls that have long plagued American would-be homeowners. Lawmakers on the Senate Banking Committee discussed the phenomenon during their first hearing of the new Congress.

    "There just isn't enough quality housing at prices that people can afford," Sen. Sherrod Brown (D-OH) said in his opening statement. "And because there aren't enough homes, renters, and homeowners are stuck paying more every month or living with peeling lead paint or leaks."

    The housing market had witnessed a shortage of 3.8 million houses as of 2019, according to data from government-backed mortgage company Fannie Mae. The National Association of Realtors estimates that homebuilders should have constructed between 5.5 million and 6.8 million more houses over the past two decades to match current demand.

    Sen. Tim Scott (R-SC) asserted that policies such as rent control and inaction on the supply chain crisis from the Biden administration have worsened the housing inventory problem.

    "It's past time to rethink the tax-and-spend strategies that keep families trapped in generational cycles of poverty and find real solutions to meaningfully impact all households," he said in his opening statement. "Government must begin responsibly helping families rather than doubling down on programs that fail to generate results. We need to leverage the successes of American capitalism by encouraging private investment in the housing sector and eliminating needless barriers that artificially restrict supply."

    Senior Biden administration officials have meanwhile called for Fannie Mae and Freddie Mac to provide affordable financing for multifamily housing construction, streamline regulations to make the construction of "mixed-income housing" and "housing that includes very low-income tenants" more simplified, and support housing projects near mass transit. Inflation rates for shelter costs increased 7.5% year-over-year as of December 2022, far exceeding the 1.8% year-over-year rate charted one month before President Joe Biden assumed office, according to data from the Bureau of Labor Statistics.

    Median home sale prices have likewise soared from $322,600 in the second quarter of 2020 to $467,700 in the fourth quarter of 2022, according to data from the Department of Housing and Urban Development. Costs plateaued in the second half of last year amid soaring mortgage rates caused by the Federal Reserve's actions to decrease inflation.

    The cooling home prices occur alongside a slowdown in homebuying activity and do not reflect an increase in affordability for would-be buyers. Monthly mortgage payments for the typical home increased more than 45% between the end of 2021 and the end of 2022, indicating that the salary required to afford such a property has increased from nearly $74,000 to more than $107,000, according to an analysis from real estate brokerage Redfin.

    The number of homes on the market has "stayed near historic lows" despite the market slowdown, according to Harvard Joint Center for Housing Studies Christopher Herbert, who testified before the Senate Banking Committee. He observed that buyers who locked in favorable mortgage terms before the recent spike in borrowing costs are unlikely to sell.

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