Lightin' Up the Housing Game: A No-Holds-Barred Analysis
Addressing the American housing shortage: Realtor.com CEO proposes a solution
Damian Eales, CEO of Realtor.com, spills the tea on solving America's housing crisis, taking big swings at excessive regulation in a appearance on 'Mornings with Maria.'
Hear ye, hear ye! The U.S. has been locked in a dance with affordability and supply issues in its housing market for quite some time, making it a real pain for people to snag a pad they can call their own. According to Eales, "We're really dragged our feet in terms of housing transactions for the last two years, diving to 30-year lows. That's primarily down to high interest rates." Most mortgages? You guessed it – a whopping 70% of them are under 5%, with the current rates hovering around 6.8%. Sellers are clammy about cashing out 'cause they'd end up refinancing with a pricey bill.
High house prices compared to income have fueled an entry barrier for many, with the Realtor.com CEO chiming in, "That's a real tough break for the average Joe."
Is the US Housing Market Catering to Buyers Yet?
So, what gives? A report released by Realtor.com in March reveals a supply deficit of 3.8 million homes – yikes! Eales admits there's hope, "We're hopeful that the economy's various moving parts will come together, helping to ease mortgage rates."
The current 30-year fixed mortgage rate is hovering around 6.81%, according to Freddie Mac. Eases mortgages mean liberated markets, but it ain't the whole enchilada, Eales explains, "Even if mortgage rates dropped significantly, it'd set the market free, but it wouldn't tackle the issue of a severe lack of supply, which the president is also aiming to address through inflation-freeing federal lands."
The Trump administration's Federal Land Conversion Task Force made its grand entrance in March, with a mission to pinpoint "underutilized" federal lands that could be prime for housing construction. Moreover, streamlining the land transfer process and a focus on affordable housing initiatives are in the pipeline, according to a memorandum of understanding.
Federal Land or Bust?
Eales emphasizes, "It's not just the Feds' job to get their houses in order – this is local governments' game too. They've gotta remove bullsh*t regulations and strip away hefty red tape to foster housing affordability and supply."
Analysts estimate that a whopping 25% of a new home's cost is due to bureaucratic nonsense. Eales throws shade at environmental regulations as the main culprit, complaining they've been "weaponized to straight-up block development altogether."
He continues, "To make the housing crisis a distant memory, we gotta tackle environmental regs and get our hands on restrictive zoning laws – especially the ones that keep multifamily developments from popping up where they're most needed, like around public transport stations."
Eales adds, "Mortgage rates ain't the only regulation there's room to tweak – there's a slew of areas with potential for adjustment, like those who profit by abusing the planning process."
His 'Mornings with Maria' appearance coincided with Realtor.com releasing report cards for America's 50 states and Washington, D.C. In the March edition of 'Grading the States: Affordability & Homebuilding Report Cards,' only three states – South Carolina, Iowa, and Texas – earned A grades for affordability and future supply initiatives. On the other side of the spectrum, seven states received F grades, with New York, Massachusetts, and Rhode Island bringing up the rear.
Eales thinks he knows why these states are floundering, "I believe regulations are strangling affordability and homebuilding in some areas that ain't stepping up to the plate." But he also tosses the growth mindset into the mix, "I think it's also a state of mind thing – the South and Midwest have a real hustle mentality, and they want new housing."
In March, the National Association of Realtors pegged the median price of existing single-family homes at $408,000, while the median price of new single-family homes purchased that month stood at $403,600, according to the U.S. Census Bureau.
Let's cut to the chase – strict regulations, high mortgage rates, and stingy supply have the housing market in a chokehold. Give the people what they want, Smokey –drop rates, shred regulations, and build, build, build!
- Damian Eales, the CEO of Realtor.com, stated that high interest rates have been contributing to the housing market's sluggish transactions for the past two years.
- The current 30-year fixed mortgage rate is around 6.8%, according to Freddie Mac, and most mortgages have rates under 5%.
- Eales acknowledged that even if mortgage rates decreased significantly, it wouldn't resolve the severe lack of supply in the housing market.
- The Federal Land Conversion Task Force, introduced by the Trump administration, is aiming to identify underutilized federal lands that could be suitable for housing construction.
- Eales emphasized that local governments need to remove unnecessary regulations and red tape to promote housing affordability and supply.
- In the March edition of 'Grading the States: Affordability & Homebuilding Report Cards' by Realtor.com, only three states (South Carolina, Iowa, and Texas) received A grades for affordability and future supply initiatives.
- Analysts estimate that a quarter of a new home's cost is due to bureaucratic red tape, with environmental regulations and restrictive zoning laws being major issues in addressing the housing crisis.
