unilateral war against the worst inflationary crisis in 40 years is going precisely according to plan. The fastest monetary tightening cycle since the Volcker era in the early 1980s has succeeded in bringing downfrom the near-double digits to 3.2% as of this February. That likely means fewer rate hikes than expected, with the aim of keeping prices lower.
Yet the one, crucial industry the Fed has been unable to penetrate despite its best efforts is perhaps the most consequential for the country more broadly: housing. Average and median home sale prices rose by around 48% from the peak of thepandemic to the end of 2022, but they have only fallen by around 11% in the past year. And why? Because of years of anti-growth zoning laws, which in a bipartisan patchwork across the country effectively criminalized creating new housing.
But local YIMBYism may be the best we can continue to hope for as Biden seemed to ignore the supply-side factor altogether during his latest State of the Union address. The president entirely ignored his halfhearted past attempts to incentivize zoning reform on a federal level, instead promising $5,000 cash credits to first-time homeowners.may have caused the problem in the first place, but in the national spotlight, even the worst economics still sound like a great sell in an election year.