Is There an Extremely Simple Fix for Affordable Housing? | Odd Lots

Housing affordability remains one of the single greatest sources of economic stress. Even if inflation measures were to come down, the simple cost of shelter is a huge burden on a wide swathe of the population. Hardly anyone disagrees with the idea of increasing supply, but this is easier said than done. There isn't a lot of spare construction capacity and the political fights over liberalizing zoning are tedious and slow. On this episode, we speak with Kevin Erdmann, a senior affiliated scholar at the Mercatus Center at George Mason University, who proposes a simple idea. He argues that after the Great Financial Crisis, regulators over-tightened lending standards, and in so doing, took out the entire "starter home" segment of the new housing market. He says that if Fannie and Freddie were to liberalize their lending standards, homebuilders would be incentivized to build more homes that cater to people with lower incomes and lower FICO scores, essentially re-creating a whole slice of the new home market that's disappeared over the last 15 years. Read More: US Homebuilders Face a Supply Chain Snarl From Tariff Battles (https://www.bloomb/?utm_medium=referral&utm_source=podcast&utm_campaign=odd_lots&utm_content=articleerg.com/news/articles/2025-03-06/us-homebuilders-face-a-supply-chain-snarl-from-tariff-battles) US Mortgage Rates Decline to 6.88%, Lowest Level This Year (https://www.bloomberg.com/news/articles/2025-02-26/us-mortgage-rates-decline-to-6-88-lowest-level-this-year?srnd=undefined?utm_medium=referral&utm_source=podcast&utm_campaign=odd_lots&utm_content=article) Only Bloomberg - Business News, Stock Markets, Finance, Breaking & World News (http://bloomberg.com/) subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlots (https://www.bloomberg.com/subscriptions/oddlots?in_source=oddlotspodcast) Bloomberg's Joe Weisenthal and Tracy Alloway analyze the weird patterns, the complex issues and the newest market crazes. Join the conversation every Monday and Thursday for interviews with the most interesting minds in finance, economics and markets. Subscribe to Bloomberg Podcasts: https://bit.ly/BloombergPodcasts Check out more Odd Lots: https://youtube.com/playlist?list=PLe4PRejZgr0MuA6M0zkZyy-99-qc87wKV Get the Odd Lots newsletter via https://www.bloomberg.com/account/newsletters/oddlots And for all things Odd Lots, visit https://www.bloomberg.com/oddlots Visit our other YouTube channels: Bloomberg Television: https://www.youtube.com/@markets Bloomberg Originals: https://www.youtube.com/bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake #Bloomberg #Podcast #OddLots Visit us: https://www.bloomberg.com/podcasts Follow Bloomberg Podcasts on Twitter: https://twitter.com/podcasts For coverage on news, markets and more: http://www.bloomberg.com/video

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