U.S. Treasury Secretary Janet Yellen in Minneapolis, Minnesota, on Monday. Photo: Nicole Neri/Bloomberg via Getty Imagesthat it's trying to address the housing affordability crisis — though any efforts to make a dent in the years-long shortage may not pay off for years to come."But we face a very significant housing supply shortfall that has been building for a long time and this supply crunch has led to an affordability crisis," she said.
Yellen said the CDFI Fund was updating a rule for the Capital Magnet Fund, the existing affordable housing investment program, "to reduce administrative burden and allow recipients to focus their resources on the production and preservation of housing," per a Treasury The Treasury chief revealed an effort to provide greater interest rate predictability to state and local housing finance agencies borrowing from the Federal Financing Bank to support new housing development.The U.S. housing shortage has been worsened by the "lock-in" effect. That is, existing homeowners staying put to hold on to low mortgage rates.
Many homebuilders are hesitant to break ground on new homes, as they face higher interest rates for construction loans, labor shortages and a shortage of lots to build on, the National Association of HomebuildersShare on twitter