The current state of the housing market

Kyla Scanlon, author of ‘“n This Economy?,” joins TheStreet to give her take on the current state of the housing market.

Transcript

00:00What do you make of the current state of the housing market?

00:04Yeah, the housing market is quite interesting.

00:08I interviewed the Deputy Secretary of the Treasury, Wally Adeyemo,

00:11about what the Treasury is doing to help address the massive issues

00:15that we are facing in the housing market.

00:17And during our interview, he was like,

00:19we just don't have enough homes.

00:21And I think that is the big summary of the housing market problem

00:24that we have, is that we have homes in various areas,

00:28but not where people want to live.

00:31And you kind of have to design around economic centers, right?

00:34And so the housing crisis is creating a lot of frustration for people.

00:40You know, the mortgage rates are really high

00:42because the Federal Reserve was raising rates in order to battle inflation.

00:45And then you just don't have enough homes.

00:47You know, post Great Recession, home builders didn't want to build.

00:49Now rates are high, they don't really want to build again.

00:52And so you kind of have this perfect storm of not enough homes,

00:56really high rents for people, and it creates a lot of issues.

00:59Home affordability in the U.S. has fallen to its lowest since 2007.

01:04What do you think is the right prescription to address this issue?

01:09I think it is building more homes.

01:12Yeah, I think that a lot of the policies that have been put forward

01:16by the Biden administration have been about subsidizing demand.

01:20So like grants to first-time homeowners or money to first-time homeowners.

01:25Which isn't always good if there's not enough homes and places for the money to go to.

01:32It just kind of exacerbates issues that we're facing.

01:34So I think it's kind of about the missing middle of housing,

01:37like building more duplexes and triplexes and townhomes.

01:40It's about rezoning.

01:42You know, I think it's like 70 to 90% of Los Angeles is zoned just for single families.

01:47So it's very difficult to build apartment buildings there.

01:50And you kind of need that dense mixed-use space for people to live

01:56and not have it be exorbitantly expensive.

01:58So it's about building different types of homes.

02:00It's about rezoning.

02:01It's about making sure that policies being passed

02:04are going towards subsidizing supply versus subsidizing demand.