POWELL NOTES STRUCTURAL SHORTAGE OF HOMES AS DEMAND OUTPACES SUPPLY NATIONWIDE
Federal Reserve Chair Jerome Powell said the U.S. has not built enough housing “for a long time,” pointing to years of undersupply behind rising costs and limited affordability.
Federal Reserve Chair Jerome Powell said Tuesday that the United States has failed to build sufficient housing for many years, describing the shortage as a structural barrier that continues to push home prices and rents higher nationwide. His comments come as policymakers grapple with the economic impact of tight housing supply, elevated mortgage rates and demographic pressures.
Powell emphasized that the persistent imbalance between housing supply and demand is a major contributor to affordability problems, even as some financial conditions have begun to stabilize. “We just haven’t built enough housing over a long period,” he noted, adding that shortages affect both buyers and renters.
Economists say the U.S. underproduction of homes dates back more than a decade, worsened by construction slowdowns after the 2008 financial crisis, zoning restrictions, limited land availability and labor shortages in the building industry. Despite record demand, new construction has not kept pace with population growth.
Powell reiterated that the Fed’s tools — mainly interest-rate policy — cannot directly fix supply shortages but influence borrowing costs. He suggested long-term solutions will require coordinated action by local governments, private developers and federal housing programs to expand the overall housing stock.
Housing advocates welcomed Powell’s acknowledgment, arguing that the supply crisis contributes to rising homelessness, shrinking first-time homebuyer access and long-term inequality across metropolitan and rural areas. Some lawmakers are now calling for expanded incentives for construction and zoning reform.
The remarks come as the national housing market remains highly sensitive to mortgage-rate volatility and continues facing one of the largest affordability gaps in decades.
