Norbert Michel and Jerome Famularo
On September 1, Treasury Secretary Scott Bessent said that President Trump may declare a “housing emergency” in the fall. This move comes after a long list of politicians, commentators, and think tanks have deemed the US housing market to be in a “crisis” that demands immediate federal government action.
Additionally, Bessent has claimed that administration officials are looking into “standardizing local building and zoning codes,” while saying, “We don’t want to step into the business of states, counties, and municipal governments,” a contradictory statement. And Bessent has echoed other administration officials by calling for lower interest rates, though lower interest rates would, all else being equal, put upward pressure on home prices.
Regardless, the data undermines the “crisis” narrative. For instance, the median annual housing cost as a percentage of income has been flat since 2001. This remains true whether we are talking about renters, first-time homebuyers, repeat homebuyers, or all households in general (see Figure 1).
Additionally, as of the second quarter of 2025, the price of houses sold relative to income has returned to its pre-pandemic level. This ratio is also lower than much of the period before (and immediately after) the Great Recession. Eventually, after recovering from the Great Recession, 30-year mortgage rates dropped to a historic low, which helped to explain the increase in prices at that time. (See figure 2.)
The administration has already enacted harmful trade and immigration policies based on dubious emergency claims. Declaring a housing emergency would be just as suspect and would likely usher in new federal policies that make housing less affordable.
