HOUSES ARE EXPENSIVE BECAUSE THERE AREN'T ENOUGH OF THEM

National Association of Realtors Offers White House Solutions to Fix Inventory Crisis

November 29, 2022

Being a Real Estate Professional, Challenging Markets

By: Melissa Dittmann Tracey

REALTORS® encourage the Biden administration to keep housing supply, affordability at the top of its legislative agenda.

In an effort to keep housing inventory a top legislative priority following the midterm elections, National Association of REALTORS® CEO Bob Goldberg met with White House officials and real estate industry leaders last week to discuss possible solutions to the supply crisis, which is battering affordability and sidelining more buyers. REALTORS® have developed a blueprint for addressing severe inventory shortages and are advocating for legislation on Capitol Hill to help more Americans afford homeownership.

NAR has long warned that decades of underinvestment and underbuilding have created a dire housing shortage in America that will require a long-term commitment to overcome.

At the meeting, Goldberg and administration officials brainstormed several possible measures to promote greater housing opportunity, including reducing the Federal Housing Administration’s mortgage interest premium, lowering Fannie Mae and Freddie Mac’s guarantee fees, expanding the Section 8 rental voucher program and supporting new fair housing initiatives. Goldberg also stressed NAR’s opposition to a current proposal to place rent caps on Fannie- or Freddie-backed rental properties, which could drive many small housing providers from the market. Increasing the supply of affordable rental housing is a top priority for the association, Goldberg said.

Following Goldberg’s meeting, NAR 2023 President Kenny Parcell sent a letter(link is external) to the White House outlining a range of potential inventory solutions, such as broader down payment assistance on the local, state and federal levels and access to special purpose credit programs to help better meet the credit needs of underserved borrowers. “When it comes to affordability, the administration has several tools it can use now to reduce costs, especially in higher-cost markets where housing options continue to diminish,” Parcell writes in the letter. “Reducing fees for first-time home buyers, expanding housing voucher programs and providing incentives for more participation from housing providers would provide direct and immediate support for renters and aspiring homeowners.”

Government investment is necessary to stop the erosion to housing affordability over the long run, Parcell writes, encouraging a policy focus on new construction, zoning reforms and tax incentives to spur more construction and conversion of vacant commercial space into residential units. Parcell says NAR will continue to collaborate with the administration and other industry groups to put these possible solutions into action, particularly as rising mortgage rates and inflation become larger economic issues.