Soaring home prices, coupled with historically high mortgage rates, have made the dream of homeownership harder to attain. Kyla Scanlon, Author, 'In This Economy?' joined TheStreet to discuss her solution to this perfect storm.
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Full Video Transcript Below:
CONWAY GITTENS: What do you make of the current state of the housing market?
KYLA SCANLON: Yeah, the housing market is quite interesting. I interviewed the Deputy Secretary of the treasury, Wally Adeyemo, about what the Treasury is doing to help address the massive issues that we are facing in the housing market. And during our interview, he was like, we just don't have enough homes. And I think that is the big summary of the housing market problem that we have, is that, you know, we have homes in various areas, but not in where people want to live. And you kind of have to design around economic centers, right.
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And so the housing crisis is creating a lot of frustration for people. You know, the mortgage rates are really high because the Federal Reserve was raising rates in order to battle inflation. And then you just don't have enough homes, you know, post Great Recession home builders didn't want to build. Now rates are high. They don't really want to build again. And so you kind of have this perfect storm of not enough homes, really high rents for people, and it creates a lot of issues.
CONWAY GITTENS: And so home affordability in the U.S. has fallen to its lowest since 2007. What do you think is the right prescription to address this issue?
KYLA SCANLON: I think it is building more homes. Yeah I think that a lot of the policies that have been put forward by the Biden administration have been about subsidizing demand. So like grants to first time homeowners or money to first time homeowners, which isn't always good if there's not enough homes and places for the money to go to. It just kind of exacerbates the issues that we're facing. So I think it's kind of about the missing middle of housing, like building more duplexes and triplexes and townhomes. It's about rezoning.
You know, I think it's like 70% to 90% of Los Angeles is zoned just for single family. So it's very difficult to build apartment buildings there. And you kind of need that dense mixed use space for people to, you know, live in and not have it be exorbitantly expensive. So it's about building different types of homes. It's about rezoning. It's about making sure that policies being passed are going towards subsidizing supply versus subsidizing demand.
