US Enacts New Law to Gradually Increase Housing Supply Through Regulatory Relief
The United States took a significant step toward addressing its housing shortage with the automatic enactment of the "21st Century Housing Pathway Act" last weekend. The law went into effect after President Donald Trump chose not to veto it, despite his repeated opposition. Experts anticipate this legislation will be the most substantial housing market reform in three decades, responding to widespread frustration over soaring mortgage costs and near-record home prices.
The housing crisis stems from long-term underbuilding, rising demand, zoning restrictions, and regulatory inaction rather than a single event or policy failure. The new law consolidates 47 proposals aimed at expanding housing supply, reducing costs, and improving access to affordable homes. However, experts like Urban Institute researcher Jonah Primark caution that the law will not provide immediate relief, as new home construction and regulatory changes require time and additional federal and local government resources.
The legislation directly targets major cost drivers such as land-use restrictions, approval delays, financing limits, and regulatory hurdles, according to Selma Haf, chief economist at real estate data firm Cotality. She echoed concerns that benefits will materialize gradually rather than overnight. Bill Evans, president of the National Association of Home Builders, highlighted that the law encourages local governments to reform land allocation and usage policies that have historically constrained homebuilding.
The housing affordability challenge persists amid high mortgage rates averaging 6.5% for a 30-year fixed loan. The median price for an existing home reached $440,600 last month, a 49.2% increase since 2020, with Realtor.com estimating a shortage of about 4 million homes. A key provision restricts large institutional investors owning 350 or more single-family homes from acquiring additional properties, with exceptions for rental projects and initiatives helping renters become homeowners.
