Fed Chairman Powell Cites NAHB Concerns in Congressional Testimony

Filed in Construction Industry, Home Building by on February 26, 2019 4 Comments

Federal Reserve Chairman Jerome H. Powell told the Senate Banking Committee today that the housing affordability crisis is due in part to the challenges home builders face with labor shortages and rising material prices.

When asked about the factors contributing to the rising costs to build single-family and multifamily housing, Powell responded with the concerns that he has heard from home builders:

“What you hear from builders is labor shortages, particularly skilled labor shortages … You also hear higher materials costs, some of which are affected by tariffs, of course. You hear [builders] under tremendous cost pressure. That was flowing through into higher prices and that was making the affordability calculus a little bit more challenging for buyers, at the same time [interest] rates were going up … I think altogether that picture slowed down housing construction in the last year or so.”

During “The Semiannual Monetary Policy Report to Congress,” Powell said that the cost of materials, lots and and labor are the most important factors in the price of a home. He noted the nation’s immigration policy impacts the availability of labor in the construction industry. Powell also acknowledged that student debt is a barrier to homeownership for millennials.

You can listen to his testimony in the clip above.

 

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Comments (4)

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  1. robin ward says:

    hear ! hear !

  2. John Bitely says:

    Local government regulations are adding dramatically to our lot prices. Yes, NIMBY is still alive and thriving. Will the consumer ever wake up and realize that when they clamor for more restrictions and limiting development that ultimately they will pay more?

  3. @John Bitely is correct. Local government regulations and inefficiencies are adding tremendous costs to the development process. We thank the fed chair for speaking up, but the place he can help the most is within the government itself.

  4. Ronald Paul Jackson says:

    No one wants lower priced homes in any town or county they fight tooth and nail to stop it. They make up rules and regs to stop or slow down the process hoping we will give up.

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