Fed Official Warns of Severe Housing Shortage Driving Up Shelter Costs
A top Federal Reserve official has sounded the alarm on the US housing market, warning of a severe shortage driving up shelter costs and prompting concerns about further interest rate hikes.
Fed Gov. Michael S. Barr highlighted the growing disconnect between Americans' earnings and housing expenses at an event in Chicago on Wednesday.
The Atlanta Fed index tracking homeownership affordability hit a 21-year low this summer, before factoring in higher mortgage rates, which have exceeded 7% as of Thursday, according to Freddie Mac.
Barr cited several factors contributing to the housing affordability crisis, including onerous regulations and zoning policies that constrain homebuilding, a lack of productivity growth in the sector, and decades of under-building following the subprime mortgage crisis.