The housing market has seen an unsustainable runup during the pandemic period, with prices rising 44% between February 2020 and July of 2022. Rising mortgage rates and the Federal Reserve’s interest rate hikes will dampen housing demand in the months ahead. However, a lack of supply remains a big problem, due to challenges in zoning, permitting and supply chains.
Addressing these supply constraints is fundamental to solving the housing shortage. And while the patchwork of state and local construction regulations limits what the federal government can do, there are two ways it can try to boost housing supply.
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Arpit Gupta is an adjunct fellow at the Manhattan Institute and an assistant professor of finance at the NYU Stern School of Business. You can follow him on Twitter here.
This piece originally appeared in CNN.com