The lack of housing supply is a significant issue and presents a barrier to homeownership. However, housing supply is only one half of the housing crisis problem; the other half is affordability. Homeownership rates will not increase, no matter how many new homes are built, if these homes are too expensive for consumers to purchase. Several proposed policies and actions advanced both by members of the 119th Congress and by the second Trump Administration have the potential to increase unaffordability, thus undermining the positive effect an increase in housing supply will have in helping to relieve the housing crisis.
First, the Administration’s tariffs and deportation policies will increase the costs of building these new homes. Second, affordability rests on consumers’ ability to access credit at reasonable rates. The Administration’s plan to significantly cut the federal workforce of the Consumer Financial Protection Bureau (CFPB) and the Federal Housing Administration (FHA) at the U.S. Department of Housing and Urban Development (HUD) will negatively impact access to credit. We urge the Subcommittee to give affordability equal weight when addressing the housing supply shortage. Failing to address affordability will exacerbate the housing crisis instead of alleviating it.
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