Housing Emergency Ahead? White House Hints at Action

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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Episode Transcript

Speaker 1 (00:00):
Welcome to the Deep Dive Since September.
You know that time of yearcrisp air, fresh starts.

Speaker 2 (00:05):
Always feels like a reset, doesn't it?

Speaker 1 (00:06):
It really does and we're channeling that energy
here today.
We've got quite a stack ofsources, actually a few reports
and really timely updates.
It paints a pretty vividpicture of the housing market
right now.

Speaker 2 (00:18):
A complex one, I imagine.

Speaker 1 (00:19):
Oh, definitely complex.
We're not just, you know,skimming headlines, we're going
deep, looking at the big federaldebates, but also what's
happening like on the ground forbuyers, for renters.
It's complicated.
So our mission, basically, isto unpack it all the data, the

(00:40):
promises, the market realities.
We want to give you a clearpicture of where things stand
and, maybe, more importantly,why all this stuff actually
matters to you.

Speaker 2 (00:44):
That's absolutely the right way to look at it.
Housing is well, it's thisintersection of everything,
isn't it?
Economics, politics, socialtrends, understanding how they
all you know, interact.
It's not just academic, itreally hits home, affects
people's plans, their futures.

Speaker 1 (00:58):
It really does, okay, so let's jump right in.
There's some headline newssetting the stage.
We're hearing serious talk fromthe Trump administration about
maybe declaring a nationalhousing emergency this fall.

Speaker 2 (01:09):
A national emergency Wow.

Speaker 1 (01:12):
Treasury Secretary Scott Besant confirmed they're
discussing it.
The president acknowledged ittoo.
Declaring an emergency sounds,well, pretty significant, but
what can the federal governmentactually do?
What leverage do they have here?

Speaker 2 (01:26):
That is the million dollar question, isn't it?
And, honestly, it's less directthan you might think.
Sure, they can declare anemergency, but the real power
for things like zoning permits,density, that mostly sits with
states and, even more so, localmunicipalities.

Speaker 1 (01:42):
Right local control.

Speaker 2 (01:43):
Exactly, it's a longstanding thing, so for any
big federal declaration toactually work on the ground,
you'd need extraordinarycoordination across all levels.
It's a huge ask.

Speaker 1 (01:52):
That's a really good point.
So it makes you wonder how dothese federal ideas, you know,
maybe standardizing buildingcodes or pushing down closing
costs, how do they square withthat tradition of local control?
Seems like built-in friction.

Speaker 2 (02:06):
Oh, absolutely.
It's a friction point.
Think about it.
Washington wants one rule, butevery town's got its own history
, its own environmental concerns, its own way of doing things.
The feds can nudge, maybe tiefunding to certain standards,
but just overriding local zoning, that's a tough battle against
precedent and local autonomy.
So it often ends up being moreabout incentives, partnerships,

(02:28):
less about direct orders fromthe top.

Speaker 1 (02:31):
OK, that makes sense, and it leads us right into what
many folks see as the absolutecore issue Supply, just not
enough homes.
The National Association ofRealtors, NAR, just put out a
pretty striking number.
They're saying the US is short,wait for it 4.7 million homes.

Speaker 2 (02:44):
Wow, 4.7 million.

Speaker 1 (02:46):
Yeah, and they're pointing straight at supply
constraints as the biggest blockto affordability, more than
just rates.
That's significant andinterestingly, nar came right
out and said they're ready towork with leaders federal, local
, whoever if an emergency isdeclared, so signaling
cooperation there.
It's not just talk from theadministration either.
Seems like they're actuallytaking steps.
Like the Department of theInterior, they started looking

(03:08):
at federal land.

Speaker 2 (03:10):
Ah, repurposing, federal land.

Speaker 1 (03:12):
Exactly Seeing what could potentially be used for
affordable housing.
That's a concrete action couldunlock some space.

Speaker 2 (03:20):
And if you connect that to the bigger picture,
legislatively, there's movementtoo In Congress.
You've got the Road to HousingAct of 2025.
It's actually getting somedecent bipartisan support, which
is interesting in itself.

Speaker 1 (03:32):
OK, road to housing.
What's the idea there?

Speaker 2 (03:34):
Well, it's designed to create a kind of best
practices guide for local zoningand land use reforms, basically
offering models like making iteasier to build accessory
dwelling units, adus orstreamlining permits that local
governments could adopt.
It's not a mandate, more like atoolkit.

Speaker 1 (03:50):
Got it.
So offering options, notforcing hands.

Speaker 2 (03:53):
Exactly so.
You've got the federal landangle and this legislative
framework pushing local reform,both trying to tackle that
fundamental imbalance right Toofew homes for the people who
need them.
It shows, I think, that evenwith political divides there's
this growing agreement thatsupply is really really key.

Speaker 1 (04:11):
Right.
And speaking of approaches inpolitics, we can't really ignore
the promises made, especiallyaround the last election.
Housing affordability was hugefor voters.

Speaker 2 (04:20):
A massive issue.

Speaker 1 (04:21):
And we heard specific pledges.
Remember, then, candidateKamala Harris proposing that
$25,000 down payment assistancefor first-time buyers.

Speaker 2 (04:30):
Yep aimed right at that initial hurdle.

Speaker 1 (04:32):
And President Trump talked a lot about slashing
building regulations, ties backto supply right and, very
specifically, getting mortgagerates down to 3% or less.

Speaker 2 (04:41):
Oh yes, the 3% promise.

Speaker 1 (04:43):
Big promises Clearly aimed at making housing feel
more attainable.

Speaker 2 (04:47):
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% sinceJanuary, often closer to double
that.
Honestly.

Speaker 1 (04:57):
Stubbornly high.

Speaker 2 (04:58):
Very stubborn.
The market just hasn'tcooperated with the political
goals there and theadministration's current play
seems to be putting pressure onthe Federal Reserve right,
Pushing them to be moreaggressive on rate cuts to lower
borrowing costs.
But the Fed, well, they havetheir own mandate.
Inflation control is number one, not specifically housing costs

(05:19):
.
It's a delicate situation.

Speaker 1 (05:22):
It really makes you wonder, though, doesn't it?
You hear these big promises cutregs, 3% mortgages, but the
market just keeps doing itsthing.
What does that tell us?
Is the market just too big, toocomplex?

Speaker 2 (05:32):
I think that's a huge part of it.
There's just immense inertiaglobal money flows, investor
feelings, those deep supplyproblems we talked about.
Political will, even strongpolitical will, struggles to
turn that ship quickly.
It's almost like the market hasits own gravity.
Policy can influence it, sure,but it operates on its own
complex timeline, beyond any oneadministration's direct control

(05:53):
sometimes.
And that tension between thepolitical wants and the market
realities, that's kind ofdefining things right now.

Speaker 1 (06:00):
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 storystarts with the affordability
squeeze.
It's hitting hard.
Latest numbers show buying ahome now costs get this $1,200
more per month than before thepandemic.

Speaker 2 (06:17):
Oof, that's a concrete number.

Speaker 1 (06:19):
It really is.
That's not abstract.
For a lot of families, $1,200 amonth is well, it's huge.
It puts a real human cost onthis whole situation.

Speaker 2 (06:27):
Absolutely.
And tied right into that, ofcourse, are mortgage rates.
Now they did dip recently to6.56%.

Speaker 1 (06:33):
Okay, lowest in 10 months Right, sounds like
progress.

Speaker 2 (06:36):
It sounds like it, but the key word is volatility.
Rates are jumping aroundconstantly as the market tries
to guess the Fed's next move.
So a small dip now Doesn'tguarantee a smooth ride down.
It's likely to stay bumpy.

Speaker 1 (06:48):
Yeah, that makes sense, and we're seeing shifts
in activity too.
Pending sales contracts signedbut not closed yet.
They declined again.

Speaker 2 (06:55):
Still slowing down.

Speaker 1 (06:56):
Yeah, and maybe more telling.
Homes are sitting on the marketabout a week longer now
compared to last year.
That frantic pace we saw seemsto be cooling off at least a bit
.

Speaker 2 (07:05):
And that slower pace well, it hits the builders too.
New home sales dropped andwhat's really interesting is
that the median price for a newhome actually fell about $20,000
below existing homes.

Speaker 1 (07:16):
Wow, that's a switch.

Speaker 2 (07:18):
It is.
It suggests builders are, youknow, cutting prices, offering
deals to move inventory.
They're not riding that pricewave like they were.
They need to clear the books.
It's a real adjustment.

Speaker 1 (07:28):
And it's so important to remember this, isn't the
same everywhere, right?
The sources highlight these bigregional differences.

Speaker 2 (07:35):
Crucial point yeah.

Speaker 1 (07:36):
Like.
Inventory is still super tightin parts of the Northeast and
Midwest, but then you look Southand West, they actually have
more homes listed now than in2019.

Speaker 2 (07:45):
A complete flip in some areas.

Speaker 1 (07:46):
Exactly so.
While we talk about nationalaverages, the local reality can
be totally different.
It's not one single crisiseverywhere.
Okay, so with all thesedynamics, sales slowing,
builders adjusting regionalsplits, it seems like we have to
bring it back to the FederalReserve.

Speaker 2 (08:08):
Their role just looms so large over everything it
really does.
And the core challenge for theFed hasn't changed inflation.
It's moderating, yes, but stillabove that 2% target they aim
for.
So, while people expect maybe amodest rate, cut eventually
those long-term yields the onesthat really drive mortgage rates
.
They've been much harder tobudge.
Why is that?
Well, they ones that reallydrive mortgage rates.

Speaker 1 (08:23):
They've been much harder to budge.
Why is that?

Speaker 2 (08:24):
Well, they reflect the market's longer view, global
factors, not just the Fed'simmediate policy rate.
So the Fed's walking thisreally, really tricky path.
Cool inflation, but don't crashthe economy.

Speaker 1 (08:36):
And adding another layer.

Speaker 2 (08:37):
Yeah.

Speaker 1 (08:38):
Political tension.

Speaker 2 (08:38):
Yeah, exactly, the sources mention this recent
tension, including calls fromthe president to remove a Fed
governor.
That kind of thing just addsuncertainty.
Markets don't like uncertaintyand it makes the Fed's already
difficult job even harder,potentially influencing how they
act or how markets thinkthey'll act.

Speaker 1 (08:58):
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 basicallybracing for more volatility this
fall.
As the Fed keeps jugglinginflation and all these other
forces play out, it really is atightrope walk For everyone

(09:26):
involved policymakers, buyers,sellers, builders everyone's
watching closely.
Okay, so as we wrap up thisdeep dive, let's quickly recap
the big themes we pulled fromthe sources.
We've seen the sheer scale ofthe problem, right that
affordability squeeze costingfamilies so much more.

Speaker 2 (09:33):
Right the $1,200 figure.

Speaker 1 (09:35):
Exactly, we talked about uneven supply, tight in
some places, looser in others,and that constant tension, that
gap between political promisesand, well, the stubborn market
reality.

Speaker 2 (09:45):
Precisely.
What really stands out is thatfriction point you mentioned
earlier.
It's a sector where local rulesand national goals just keep
colliding.
Policy changes might happen,federal land might get used,
frameworks might be adopted, butturning that super tanker, as
they say, takes time, especiallywith these deep-rooted local
dynamics.

Speaker 1 (10:03):
And that leads us to a final thought for you,
Something to chew on as autumnreally gets going.
Everyone market players,policymakers, they're all
watching.
Is this season going to bringactual tangible relief or just,
you know, more pressure onaffordability?

Speaker 2 (10:17):
Yeah, and maybe the question to ask yourself is this
Given how complex this all isand how much local factors
matter, how quickly can thesebig policy ideas federal or
state really trickle down?
How fast can they make a realdifference for individuals, for
families, maybe right there inyour own community, and what
might speed that up or slow itdown?

Speaker 1 (10:38):
Powerful questions indeed.
It's a lot to think about.
Thank you so much for joiningus for this deep dive into the
housing market.
We hope you feel a bit moreequipped to follow the story.