Robert Dietz is the chief economist of the National Association of Home Builders. Prior to joining NAHB in 2005, Dietz was an economist for the Congressional Joint Committee on Taxation. He earned a Ph.D. in economics from the Ohio State University.
Despite recent declines in mortgage interest rates, housing affordability continues to be a key concern for homebuyers. Studies show that regulatory burdens significantly elevate the cost of land development and construction, driving up costs that are passed on to the homebuyer. If we as a nation want to ease housing affordability barriers, communities should begin by reducing the regulatory burdens associated with developing land and building homes.
Since 2012, housing affordability conditions for prospective homeowners have declined. While the causes of this situation are complex, it's clear financing issues are a leading contributor holding back the market. A lack of available financing for acquisition, development and construction (AD&C) debt is restraining construction and increasing costs, and this means that new construction is not keeping pace with demand, signaling the potential for worsening affordability if policymakers don't take note.
For anyone actively working in the mortgage industry, it’s no secret that reverse mortgages have taken a brutal hit in the last two years. The U.S. Department of Housing and Urban Development issued major program changes at the end of 2017 that effectively limited the amount of proceeds and the number of people who could qualify for the loan. The result had lenders across the space enduring sizable volume drops and subsequent gashes to their bottom lines.