Released: July 25, 2022

We need to keep building houses, even if no one wants to buy

Source: Conor Dougherty & Ben Casselman, N.Y.Times (Paid Registration)

While the challenge for builders, in the short term, might be that they have too many homes and not enough buyers, the challenge for the country, in the long term, remains precisely the opposite: There are not enough houses for all the people who want them.

Freddie Mac’s chief economist, said there was an irony to what’s happening right now: The Federal Reserve is trying to snuff out inflation by increasing interest rates, which is leading to a pullback in construction, which will make housing even less affordable down the road. In a sense, policymakers are solving the immediate cost-of-living crisis (inflation) by making the longer-run cost-of-living crisis (housing) even worse.

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