The White House is now calling for some improvements in housing affordability as rates plunged in October.
Speaking on Yahoo Finance Live on Tuesday, National Economic Council director at the White House, Lael Brainard, called for strategies to make housing more affordable, including improving the supply on the market and offering tax credits, down payment assistance, and other incentives.
"We are seeing some reduction in rents, particularly in new rents, so that is encouraging. But we still need to see a much greater supply of houses that are affordable to bring those rents down," Brainard said. "We also want to make sure that first-time homebuyers really have a chance to buy their first home, so we're very focused on down payment assistance and other ways to bring costs down for those first-time homebuyers."
The call comes months after the Biden administration in July announced it is taking a "comprehensive federal approach" toward improving housing affordability. These approaches include easing land use and zoning rules and expanding financing, per CNN.
The Biden administration also announced plans to incentivize efforts to convert commercial space to residential homes.
"Our work will involve identifying areas and methods where federal funding, including climate-focused federal resources, can be used to support these conversions," Biden economic adviser Daniel Hornung said. "The General Services Administration, which manages much of the federal footprint of buildings, will launch an effort to identify and market surplus federal properties that represent the best opportunities for commercial to residential conversions."
Housing Affordability Tumbles
The housing affordability index has fallen to 91.4 in October from 94.5 the month prior. Compared to October 2022, the housing affordability index fell from 99.0.
In addition, core inflation rates, which strip out the costs of food and gas, climbed 0.3% in November, slightly higher than the 0.2% increase reported in October. Compared to November last year, the core inflation rate rose 4.0%, according to the Bureau of Labor Statistics.
Within core inflation, the shelter index grew 6.5% in the 12 months through November. However, it is lower than October's annual gain of 6.7% and March's 8.2%.
Shelter prices account for 70% of the total increase in core inflation. It accounts for the national costs of housing for both renters and homeowners. It also accounts for lodging away from home and the insurance of households and tenants.
