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Housing Emergency Ahead? White House Hints at Action

• David (Viacheslav) Davidenko

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America's housing market stands at a critical juncture, caught between political promises and stubborn market realities. Families across the nation are feeling the squeeze – buying a home now costs $1,200 more per month than before the pandemic. Behind this affordability crisis lies a fundamental supply problem, with the National Association of Realtors reporting a staggering shortage of 4.7 million homes nationwide.

We explore the complex dynamics at play as the Trump administration considers declaring a national housing emergency this fall. This raises fascinating questions about federal power versus local control. While Washington can set broad policy direction, the real levers of housing development – zoning, permits, density rules – remain firmly in local hands. This tension between national goals and municipal authority creates significant friction in addressing the housing crisis.

Political solutions are emerging, including the bipartisan Road to Housing Act offering best practices for local zoning reform, and the Department of Interior exploring repurposing federal land for affordable housing. Yet market indicators tell a nuanced story: mortgage rates recently dipped to 6.56% but remain volatile, homes are sitting on market longer, and builders are cutting prices to move inventory. These trends vary dramatically by region – the Northeast and Midwest face tight inventory while parts of the South and West actually have more listings than in 2019.

The Federal Reserve's difficult balancing act looms large over everything, attempting to cool inflation without crashing the economy. As autumn unfolds, the question becomes: how quickly can policy interventions translate into tangible relief for everyday Americans? Understanding both national trends and your local market conditions has never been more essential for navigating these challenging waters. Join us as we unpack the data, the promises, and the complex reality of America's housing landscape.

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Speaker 1:

Welcome to the Deep Dive Since September. You know that time of year crisp air, fresh starts.

Speaker 2:

Always feels like a reset, doesn't it?

Speaker 1:

It really does and we're channeling that energy here today. We've got quite a stack of sources, actually a few reports and really timely updates. It paints a pretty vivid picture of the housing market right now.

Speaker 2:

A complex one, I imagine.

Speaker 1:

Oh, definitely complex. We're not just, you know, skimming headlines, we're going deep, looking at the big federal debates, but also what's happening like on the ground for buyers, for renters. It's complicated. So our mission, basically, is to unpack it all the data, the promises, the market realities. We want to give you a clear picture of where things stand and, maybe, more importantly, why all this stuff actually matters to you.

Speaker 2:

That's absolutely the right way to look at it. Housing is well, it's this intersection of everything, isn't it? Economics, politics, social trends, understanding how they all you know, interact. It's not just academic, it really hits home, affects people's plans, their futures.

Speaker 1:

It really does, okay, so let's jump right in. There's some headline news setting the stage. We're hearing serious talk from the Trump administration about maybe declaring a national housing emergency this fall.

Speaker 2:

A national emergency Wow.

Speaker 1:

Treasury Secretary Scott Besant confirmed they're discussing it. The president acknowledged it too. Declaring an emergency sounds, well, pretty significant, but what can the federal government actually do? What leverage do they have here?

Speaker 2:

That is the million dollar question, isn't it? And, honestly, it's less direct than you might think. Sure, they can declare an emergency, but the real power for things like zoning permits, density, that mostly sits with states and, even more so, local municipalities.

Speaker 1:

Right local control.

Speaker 2:

Exactly, it's a longstanding thing, so for any big federal declaration to actually work on the ground, you'd need extraordinary coordination across all levels. It's a huge ask.

Speaker 1:

That's a really good point. So it makes you wonder how do these federal ideas, you know, maybe standardizing building codes or pushing down closing costs, how do they square with that tradition of local control? Seems like built-in friction.

Speaker 2:

Oh, absolutely. It's a friction point. Think about it. Washington wants one rule, but every town's got its own history, its own environmental concerns, its own way of doing things. The feds can nudge, maybe tie funding to certain standards, but just overriding local zoning, that's a tough battle against precedent and local autonomy. So it often ends up being more about incentives, partnerships, less about direct orders from the top.

Speaker 1:

OK, that makes sense, and it leads us right into what many folks see as the absolute core issue Supply, just not enough homes. The National Association of Realtors, NAR, just put out a pretty striking number. They're saying the US is short, wait for it 4.7 million homes.

Speaker 2:

Wow, 4.7 million.

Speaker 1:

Yeah, and they're pointing straight at supply constraints as the biggest block to affordability, more than just rates. That's significant and interestingly, nar came right out and said they're ready to work with leaders federal, local, whoever if an emergency is declared, so signaling cooperation there. It's not just talk from the administration either. Seems like they're actually taking steps. Like the Department of the Interior, they started looking at federal land.

Speaker 2:

Ah, repurposing, federal land.

Speaker 1:

Exactly Seeing what could potentially be used for affordable housing. That's a concrete action could unlock some space.

Speaker 2:

And if you connect that to the bigger picture, legislatively, there's movement too In Congress. You've got the Road to Housing Act of 2025. It's actually getting some decent bipartisan support, which is interesting in itself.

Speaker 1:

OK, road to housing. What's the idea there?

Speaker 2:

Well, it's designed to create a kind of best practices guide for local zoning and land use reforms, basically offering models like making it easier to build accessory dwelling units, adus or streamlining permits that local governments could adopt. It's not a mandate, more like a toolkit.

Speaker 1:

Got it. So offering options, not forcing hands.

Speaker 2:

Exactly so. You've got the federal land angle and this legislative framework pushing local reform, both trying to tackle that fundamental imbalance right Too few homes for the people who need them. It shows, I think, that even with political divides there's this growing agreement that supply is really really key.

Speaker 1:

Right. And speaking of approaches in politics, we can't really ignore the promises made, especially around the last election. Housing affordability was huge for voters.

Speaker 2:

A massive issue.

Speaker 1:

And we heard specific pledges. Remember, then, candidate Kamala Harris proposing that $25,000 down payment assistance for first-time buyers.

Speaker 2:

Yep aimed right at that initial hurdle.

Speaker 1:

And President Trump talked a lot about slashing building regulations, ties back to supply right and, very specifically, getting mortgage rates down to 3% or less.

Speaker 2:

Oh yes, the 3% promise.

Speaker 1:

Big promises Clearly aimed at making housing feel more attainable.

Speaker 2:

Yeah, but this is where we hit that market reality check you mentioned earlier. Those promises sounded good, but mortgage rates they've stayed well above 3% since January, often closer to double that. Honestly.

Speaker 1:

Stubbornly high.

Speaker 2:

Very stubborn. The market just hasn't cooperated with the political goals there and the administration's current play seems to be putting pressure on the Federal Reserve right, Pushing them to be more aggressive on rate cuts to lower borrowing costs. But the Fed, well, they have their own mandate. Inflation control is number one, not specifically housing costs. It's a delicate situation.

Speaker 1:

It really makes you wonder, though, doesn't it? You hear these big promises cut regs, 3% mortgages, but the market just keeps doing its thing. What does that tell us? Is the market just too big, too complex?

Speaker 2:

I think that's a huge part of it. There's just immense inertia global money flows, investor feelings, those deep supply problems we talked about. Political will, even strong political will, struggles to turn that ship quickly. It's almost like the market has its own gravity. Policy can influence it, sure, but it operates on its own complex timeline, beyond any one administration's direct control sometimes. And that tension between the political wants and the market realities, that's kind of defining things right now.

Speaker 1:

OK, let's shift from the policy and politics to what the market data itself is saying, because it tells a pretty clear story, and that story starts with the affordability squeeze. It's hitting hard. Latest numbers show buying a home now costs get this $1,200 more per month than before the pandemic.

Speaker 2:

Oof, that's a concrete number.

Speaker 1:

It really is. That's not abstract. For a lot of families, $1,200 a month is well, it's huge. It puts a real human cost on this whole situation.

Speaker 2:

Absolutely. And tied right into that, of course, are mortgage rates. Now they did dip recently to 6.56%.

Speaker 1:

Okay, lowest in 10 months Right, sounds like progress.

Speaker 2:

It sounds like it, but the key word is volatility. Rates are jumping around constantly as the market tries to guess the Fed's next move. So a small dip now Doesn't guarantee a smooth ride down. It's likely to stay bumpy.

Speaker 1:

Yeah, that makes sense, and we're seeing shifts in activity too. Pending sales contracts signed but not closed yet. They declined again.

Speaker 2:

Still slowing down.

Speaker 1:

Yeah, and maybe more telling. Homes are sitting on the market about a week longer now compared to last year. That frantic pace we saw seems to be cooling off at least a bit.

Speaker 2:

And that slower pace well, it hits the builders too. New home sales dropped and what's really interesting is that the median price for a new home actually fell about $20,000 below existing homes.

Speaker 1:

Wow, that's a switch.

Speaker 2:

It is. It suggests builders are, you know, cutting prices, offering deals to move inventory. They're not riding that price wave like they were. They need to clear the books. It's a real adjustment.

Speaker 1:

And it's so important to remember this, isn't the same everywhere, right? The sources highlight these big regional differences.

Speaker 2:

Crucial point yeah.

Speaker 1:

Like. Inventory is still super tight in parts of the Northeast and Midwest, but then you look South and West, they actually have more homes listed now than in 2019.

Speaker 2:

A complete flip in some areas.

Speaker 1:

Exactly so. While we talk about national averages, the local reality can be totally different. It's not one single crisis everywhere. Okay, so with all these dynamics, sales slowing, builders adjusting regional splits, it seems like we have to bring it back to the Federal Reserve.

Speaker 2:

Their role just looms so large over everything it really does. And the core challenge for the Fed hasn't changed inflation. It's moderating, yes, but still above that 2% target they aim for. So, while people expect maybe a modest rate, cut eventually those long-term yields the ones that really drive mortgage rates. They've been much harder to budge. Why is that? Well, they ones that really drive mortgage rates.

Speaker 1:

They've been much harder to budge. Why is that?

Speaker 2:

Well, they reflect the market's longer view, global factors, not just the Fed's immediate policy rate. So the Fed's walking this really, really tricky path. Cool inflation, but don't crash the economy.

Speaker 1:

And adding another layer.

Speaker 2:

Yeah.

Speaker 1:

Political tension.

Speaker 2:

Yeah, exactly, the sources mention this recent tension, including calls from the president to remove a Fed governor. That kind of thing just adds uncertainty. Markets don't like uncertainty and it makes the Fed's already difficult job even harder, potentially influencing how they act or how markets think they'll act.

Speaker 1:

Mortgage rates are drifting a bit lower. That's potentially good news, but, as you said, the path probably won't be smooth. Market watchers are basically bracing for more volatility this fall. As the Fed keeps juggling inflation and all these other forces play out, it really is a tightrope walk For everyone involved policymakers, buyers, sellers, builders everyone's watching closely. Okay, so as we wrap up this deep dive, let's quickly recap the big themes we pulled from the sources. We've seen the sheer scale of the problem, right that affordability squeeze costing families so much more.

Speaker 2:

Right the $1,200 figure.

Speaker 1:

Exactly, we talked about uneven supply, tight in some places, looser in others, and that constant tension, that gap between political promises and, well, the stubborn market reality.

Speaker 2:

Precisely. What really stands out is that friction point you mentioned earlier. It's a sector where local rules and national goals just keep colliding. Policy changes might happen, federal land might get used, frameworks might be adopted, but turning that super tanker, as they say, takes time, especially with these deep-rooted local dynamics.

Speaker 1:

And that leads us to a final thought for you, Something to chew on as autumn really gets going. Everyone market players, policymakers, they're all watching. Is this season going to bring actual tangible relief or just, you know, more pressure on affordability?

Speaker 2:

Yeah, and maybe the question to ask yourself is this Given how complex this all is and how much local factors matter, how quickly can these big policy ideas federal or state really trickle down? How fast can they make a real difference for individuals, for families, maybe right there in your own community, and what might speed that up or slow it down?

Speaker 1:

Powerful questions indeed. It's a lot to think about. Thank you so much for joining us for this deep dive into the housing market. We hope you feel a bit more equipped to follow the story.

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David (Viacheslav) Davidenko

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