According to Federal Housing Finance Director Mark Calabria, affordable housing is a “national problem,” a sentiment echoed by Tim Mayopoulos, Blend President, and former Fannie Mae CEO on CNBC. In this Video Spotlight, Mayopoulos discussed the factors impacting affordability, especially for first-time buyers.
Low inventory is one of the biggest factors behind affordability issues, especially among the lower end of the market, as the U.S. is currently around 2.5 million units short according to Freddie Mac. Additionally, prices are expected to rise faster at the entry-level than any other segment Mayopoulos notes.
“Here’s a labor shortage, land acquisition costs which are extremely high, and regulatory and zoning challenges,” said Mayopoulos.
What about the risk of recession? Mayopoulos addressed the worries about another recession, and if we are currently “planting the seeds” for a new downturn.
“I think people have learned the lessons from the last crisis, and I don’t think you can solve this problem by lowering credit standards,” he said. “Credit standards are really at an appropriate place, but what we need to do is think about housing stock being part of the national infrastructure. We need to figure out how to create more supply.”