5 Housing Supply Shortage Topics Effecting the U.S.

- 12 March, 2025

KEY ISSUES

National Association of Home Builders is pushing urgency in housing shortages
Majority of households today are unable to purchase a starter home
Affordability has multiple issues with the increase of the cost of a new home
Facts are that homes are not affordable and solutions are proposed by the NAHB

Administration in the middle of the housing crisis

A new administration in place, there are policies put into place to increase the housing supply. These blockers are key issues creating a housing supply shortage and high home prices. These policies should help ease the housing market affordability crisis. Builders are able to create more houses at reasonable costs. The statement made to Congress by the National Association of Home Builders (NAHB).

Committees and hearing to improve the housing supply shortage

The House Financial Subcommittee on Housing and Insurance on March 4^th held a meeting including NAHB Chairman Buddy Hughes. Buddy claimed “the U.S. is facing a housing affordability crisis. Numbers should 77% of households are unable to purchase a new home in the current market”.

What has been reported is that the affordability issue is being fed by a shortage of 1.5 million dwellings. Construction costs are drastically skyrocketing comparatively to household incomes. The NAHB had tentatively introduced a 10-point housing plan to curb this gap.

The NAHB recognized 5 key areas that are driving the price up around the U.S. These issues include lending, labor, lumber, lots and laws. All these contributors combined shoot the price of construction through the roof.

Solutions acknowledged for future success

To reduce the increased housing costs loans are not being produced at the high rate they previously passed. Construction and development loans rely heavily on federal programs given by federal agencies. In 2020 due to Covid disruptions supply costs were up 34%. Laws regarding land use were becoming more stringent. Regulatory issues have been causing the largest pain to providing affordable entry-level home prices.

Solutions include Federal programs are encouraged to institute a low-income housing tax credit. Housing and Urban Development (HUD) Section 8 programs and grant programs. People in the workforce need additional support from Job Corps involving preparing young adults for careers in construction. Trade agreements with Canada must pursued to secure long-term soft lumber and reduce tariffs. Reduce high regulatory costs and allow federal oversight on rule making and agendas.

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