During his confirmation hearing for the position of treasury secretary in the Trump administration, Scott Bessent shed light on the ongoing affordability challenges in the US housing market. Bessent emphasized the pressing issue of an affordability crisis, coupled with a housing shortage that is impacting the ability of many Americans to achieve the dream of homeownership.
One of the key factors contributing to this crisis is the current state of home prices, which are reaching near record highs. Additionally, mortgage rates remain elevated and are projected to stay above 6% until 2026. This combination of high prices and interest rates is making it increasingly difficult for first-time buyers and low-income households to enter the housing market, particularly in areas experiencing rapid home-price growth.
Freddie Mac, a major player in the mortgage financing industry, has estimated that there is a significant shortage of housing units in the US, with a deficit of approximately 3.7 million units. This shortage further exacerbates the affordability issue, as the limited supply of homes drives up prices and creates barriers to homeownership for many individuals and families.
The concerns raised by Bessent underscore the need for comprehensive solutions to address the housing affordability crisis in the US. As the incoming treasury secretary, Bessent will play a crucial role in shaping economic policies that can help alleviate the challenges faced by Americans seeking to achieve the dream of owning a home.
