Yellen Urges Congress To Act On Biden Tax Plan To Address Housing Shortfall

Treasury Secretary Janet Yellen will deliver a speech in Minnesota today urging Congress to act on President Biden's tax plan - which includes a new USD$100 million fund to support affordable housing financing and bolstering the Federal Financing Bank’s financing of affordable housing to address an "affordability crunch" in the housing market.

• Yellen will say: “Inflation is also down almost two-thirds from its peak. But President Biden and I know that prices for key household expenses like health care, energy, and housing are still too high, in large part due to challenges that have been mounting over decades.
• “On housing, I expect that shelter inflation will moderate, and we see certain positive signs, such as the fact that total units under construction remains at a 50-year high. But we face a very significant housing supply shortfall that has been building for a long time. This supply crunch has led to an affordability crunch.”
• “We need Congress to act... On housing specifically, the President has called on Congress to provide a tax credit for first-time homebuyers, which would help more than 3.5 million families purchase their first home in the next two years. President Biden has also focused on expanding housing supply, putting forward a plan to build over 2 million homes...”
• AP notes: "Sal Guatieri, a senior economist at BMO Capital Markets Economic Research, wrote Friday that little change is expected in the housing market “until the Fed reduces policy rates.”"