McHenry at Hearing on Housing Inflation: Doubling Down on Failed Housing Policies is Not the Answer
Washington,
December 1, 2022 -
Today, the House Financial Services Committee is holding a hearing on housing inflation. While Democrats advocate for dumping more taxpayer dollars into ineffective programs and an already overheated housing market, Republicans are pushing for commonsense solutions to make homeownership more accessible by expanding our housing supply.
Watch Republican Leader Patrick McHenry’s opening remarks here.
Read Republican Leader McHenry’s opening remarks as prepared for delivery:
“Thank you, Madam Chair, for holding today’s hearing.
“I’m glad my colleagues across the aisle are finally ready to talk about combatting inflation.
“Committee Republicans have consistently taken every opportunity to discuss the skyrocketing prices clobbering American families.
“For more than a year, Republicans have been sounding the alarm about the Democrats’ reckless fiscal agenda and its impact on households and job creators. Democrats chose to ignore these warnings.
“Republicans said that a massive $1.9 trillion dollar spending bill would wreak havoc on our economy. Democrats doubled down with even more spending.
“Republicans offered simple amendments to Democrats’ partisan bills during a June markup to actually address the inflation crisis.
“Democrats rejected each one.
“So, I have to say, today’s hearing is simply too little, too late.
“Since Democrats took control of Washington, the cost of everything has gone up—food, energy, healthcare and, of course, housing—the topic of this hearing.
“Rather than focus on the rising cost of housing, Democrats continue to turn to their tired old playbook of policies that actually make the problem worse, not better.
“These are policies such as the down payment assistance program and the numerous others included in Democrat’s doomed Build Back Better Act that throw hundreds of billions into ineffective housing programs.
“While well intentioned, these would do nothing to help lower the cost of housing or increase our housing supply.
“To find real solutions to this housing crisis, we need to take a step back.
“Consider this, the average 30-year fixed mortgage rate from June 2009 until the end of 2021 was 3.97 percent. Today, that same mortgage comes with a rate approaching a whopping 7 percent.
“The speed and magnitude of this increase is without comparison.
“There are two main contributors to this problem. First, Democrat policies have and continue to discourage new homebuilding.
“We know that artificial local barriers to construction, such as restrictive zoning ordinances and overly burdensome regulations, play a significant role in limiting new construction.
“A limited supply of something coupled with increased demand always leads to higher prices. Higher prices require larger loans.
“The second contributor is our current environment in which the Fed must tighten its monetary policy and reduce its balance sheet to fight out-of-control inflation.
“This causes mortgage rates to increase making them more expensive and riskier.
“Economists are rightfully concerned about the effects of quantitative tightening on the housing market. The $35 billion per month in agency mortgage-backed securities that are rolling off the Fed’s balance sheet takes money out of the housing market, limiting the availability of credit.
“We know the Fed’s tools to address runaway inflation are blunt, but they are necessary to stabilize the economy and return to normal credit environments.
“As lawmakers, we should do our part to assist in this effort to bring down prices. That means reining in spending and practicing fiscal discipline.
“Doubling down on failed housing policies is not the answer.
“I yield back.”
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