‘Still work to be done’ as housing bill clears another hurdle 

This week in Washington, D.C., the U.S. House of Representatives voted to advance a pivotal housing reform package — minus a key ingredient that passed in the U.S. Senate but had sparked concern among many real estate industry advocates.

Also in the nation's capital, Kevin Warsh was sworn in as the next Federal Reserve chairman and HUD released new regulatory best practices for residential home construction.

'Still work to be done' on housing legislation

On May 20, the House voted 396-13 to advance the 21st Century ROAD to Housing Act, a compilation of bills that supporters have framed as one of the biggest efforts to address housing supply and affordability concerns in nearly two decades.

But the legislation is lacking a controversial provision that would have required large institutional investors to sell build-to-rent single-family homes within seven years. The provision was initially included as part of a wider push by the Trump administration to limit corporate home purchases. However, some industry advocates warned that it might actually worsen the housing supply crisis if enacted.

The Senate, which in March passed an earlier version of the legislation that included the build-to-rent provision, is now tasked with deciding how to proceed on the House-passed package.

In a May 20 joint statement, majority and minority leaders with the Senate Banking Committee said there is "still work to be done" and vowed to continue collaborating "with the White House and our colleagues in the House."

Warsh to 'lead a reform-oriented' Fed

On May 22, Kevin Warsh was sworn in as the 17th chair of the Federal Reserve. Warsh, who previously served on the Fed's Board of Governors from 2006 to 2011, succeeds Jerome Powell, who has chaired the Fed since 2018.

Warsh faced an uphill battle to Senate confirmation amid concerns about his loyalty to President Donald Trump and ability to lead the Fed independently after the president repeatedly pressured his predecessor to lower short-term interest rates faster than the central bank was inclined.

In an apparent nod to these concerns, Trump said at Friday's ceremony that he wants Warsh "to be totally independent." 

"Don't look at me. Don't look at anybody. Just do your own thing and do a great job," Trump said. He later added: "In his mission to keep prices stable and employment high, Kevin will have the full support of my administration."

In his own brief remarks, Warsh noted that the central bank's mandate is "to promote price stability and maximum employment," aims that he said can result in lower inflation when pursued "with wisdom and clarity."

"To fulfill this mission, I will lead a reform-oriented Federal Reserve, learning from past successes and mistakes both, escaping static frameworks and models, and upholding clear standards of integrity and performance," Warsh said.

Inflation 'a gift' for Warsh?

Though the president has made his preference for lower short-term interest rates clear, it may be tough to enact cuts anytime soon amid rising inflation and stalling wage growth, with some Fed officials indicating that a rate hike is starting to seem more likely.

Recent economic data releases "may be a gift to the incoming Fed Chair because it gives him a very compelling reason to hold rates steady, at least for now, and demonstrate his independence that was so heavily questioned during his confirmation hearings," Realtor.com Senior Economist Jake Krimmel said.

"What the housing market needs is a Fed that does its job, earns the market's trust, and delivers the low stable inflation that keeps long-term yields, and therefore mortgage rates, well-anchored," Krimmel added.

NAR, NAHB applaud HUD's latest efforts to boost home construction

On May 20, HUD released a new State and Local Best Practices for Home Construction report that it said provides a "clear starting point for all state and local governments to begin, or continue, an active effort to remove unnecessary burdens to home construction."

The report highlights three main areas of focus: cutting home construction costs, unlocking land for new residential homes and accelerating construction. It suggests various ways to achieve these goals, including limiting permitting fees, tossing green energy building requirements, nixing "arbitrary limitations" on housing developments and more.

The report received praise from industry advocates, with NAR describing it as "consistent" with the association's "longstanding support for practical state and local reforms that expand housing opportunity."

NAHB Chairman Bill Owens also commended HUD's "practical framework" in a statement, saying that the steps outlined "can help boost the nation's housing supply."

"We urge local governments to adopt these sound measures to improve affordability and expand the availability of attainable housing," Owens added.