Former President Barack Obama has called for a revolution in the U.S. housing market, advocating for the reform of outdated regulations to increase the supply of homes and address affordability issues.
According to a report by Newsweek, Obama emphasized the need for bold action to meet today's housing challenges. At the Democratic National Convention in Chicago, Obama's remarks resonated strongly with the audience.
They highlighted the importance of housing affordability as a key issue for voters in the upcoming November election. The former president's call for reform comes amidst a persistent housing shortage that has driven up prices in recent years.
Obama's speech focused on the need to build more housing units and remove barriers to construction. He pointed out that current regulations have made it difficult to build homes for working people across the country.
The former president stated:
We can't just rely on the ideas of the past, we need to chart a new way forward to meet the challenges of today. And Kamala understands this. She knows for example that if we want to make it easier for more young people to buy a home, we need to build more units and clear away some of the outdated laws and regulations that made it harder to build homes for working people in this country. This is a priority. And she has put out a bold new plan to do just that.
The U.S. housing market has been grappling with a historic lack of supply, a problem that has been brewing since the aftermath of the 2007-2008 financial crisis. This shortage has contributed to rising home prices, especially during the pandemic when mortgage rates were relatively low.
Even as mortgage rates increased between 2022 and 2023, causing a slump in sales, home prices have remained stubbornly high due to the limited availability of properties on the market.
The Democratic presidential nominee, Kamala Harris, has proposed a plan to address the housing crisis if elected. Her strategy includes building 3 million new homes by the end of her first term to ease the shortage and boost homeownership.
Harris has pledged to fight against restrictive zoning laws and cut through bureaucratic red tape at local and state levels to accelerate housing production. She acknowledged that in some areas, excessive difficulties in construction are driving up prices.
Despite a modest growth in inventory this year, home prices at the national level continue to rise. As of July, Redfin reported that the median sale price of a home in the U.S. was $439,170, marking a 4.1 percent increase compared to the previous year.
The housing shortage in the United States is more severe than many realize. A recent report by Zillow estimated that the country was short of 4.5 million homes in 2022, an increase from 4.3 million the year before.
Orphe Divounguy, a senior economist at Zillow, emphasized the gravity of the situation:
The simple fact is there are not enough homes in this country, and that's pushing homeownership out of reach for too many families. The affordability crisis extends to renters as well, with nearly half of renter households being cost burdened. Filling the housing shortage is the long-term answer to making housing more affordable. We are in a big hole, and it is going to take more than the status quo to dig ourselves out of it.
Obama's call for a housing market revolution has brought renewed attention to the pressing issue of housing affordability in the United States. With the housing shortage continuing to impact millions of Americans, the need for comprehensive reform and increased construction has become a central topic in the lead-up to the November election. As candidates propose solutions to address this crisis, voters will likely pay close attention to housing policies when making their decisions at the ballot box.
