Yes, housing prices are high and interest rates are high, and while interest rates will come down, housing prices are high because of a supply problem.
Lowering standards for home loans, a traditional Democrat solution, is not going to address the problem. It will just expose the market to more risk (the last time we did that, the sub-prime crisis happened) and create greater competition for the limited supply of housing already on the market.
And that’s likely to send prices even higher.
Having the government subsidize student loans sent the cost of college soaring. Government intervention in the housing market, in the name of making housing more accessible, has raised the cost of housing.
How do we deal with the supply issue? There are the silly answers, like building in national parks, or the urban Dem answer, to abolish zoning regulations so every street can have its own housing project run by its own gang of choice.
But we can track some of the factors that sent housing prices soaring and those include the regulatory costs and the supply costs. Like the cost of lumber. The Trump admin has tried to open up more areas for logging (a more helpful solution than building in national parks) and cutting the cost of lumber would make new housing stock more viable.
More logging would make for cheaper lumber and that would make for lower construction costs. So would reducing some of the ridiculous regulations that make construction so expensive.
Much of the housing stock is off the market because people are reluctant to move because they’re unable to buy. Clearing that Catch 22 logjam would go a long way toward dealing with housing stock availability. And there’s a role for looking at how tax policy plays a role there. Lower government revenues would be more than offset by more housing stock and a viable housing market.
We can also tax foreign buyers investing in American real estate at higher rates.
Finally, and this is counterintuitive to the socialist impulse which too many Republicans have become infected with, but getting the government out of helping people who can’t afford homes buy them would reduce competition and prices.
Leave your own thoughts and suggestions in the comments.
