WH’s Deese: Housing Market Decline Is ‘Intended Result’ of Fed Policy

On Tuesday’s broadcast of Bloomberg’s “Balance of Power,” White House National Economic Council Director Brian Deese stated that the declining housing market is “the intended result of the Fed’s tightening efforts.”

Host David Westin asked, [relevant exchange begins around 17:05] “[O]ne place where there is not strength right now is the housing market. It seems like almost every day we get new numbers out which are really indicating a substantial softening in the housing market. How concerned are you about that?”

Deese responded, “Well, certainly, it’s something that we’re watching very closely. Obviously, as you know, this is the intended result of the Fed’s tightening efforts. And it’s the place where you perhaps see that tightening happen in the most direct way because of the impact on mortgage rates and that impact on economic activity. When we look at the housing market, our principal focus is around affordability, and one important element to this is to step back from the current moment. We have an affordability challenge in America that is driven by about a decade or more of underinvestment in housing supply. And so, even as we look to address very immediate issues, the longer-term answer to this question is building more affordable supply, particularly in parts of the country and jurisdictions where people want to move to economic opportunity. And so, that takes real work with states and localities changing zoning and land use policy. But we’re looking at using policy tools creatively, for example, conditioning grants for transportation dollars, on communities having more sound land use policies to build denser and more affordable housing.”

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