THERE WAS NEVER A HOUSING BUBBLE:

The Treasury Department is waving a warning flag to Congress and other policymakers about the housing market. Its message? The country is quickly running out of homes, and you need to do something about it.

Traditionally, the federal government's housing policies have been demand-side interventions. Things like the mortgage interest deduction, which reduces homeowner's taxes (stimulating demand) or the Fed buying up over a trillion dollars in mortgage bonds to help bring down mortgage rates (also stimulating demand). These types of policies are broadly popular since they help people afford something expensive. But they don't do anything to reduce the cost of housing.

Now, in a memo authored by Deputy Secretary of the Treasury Wally Adeyemo, he makes the case for an increased focus on supply-side interventions. Simply put: We need to build more homes.

"Ultimately, the biggest driver of the lack of affordable housing today is a supply constraint that has existed before the COVID pandemic but has been exacerbated by the pandemic," Adeyemo tells Vox.

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