{"id":7953,"date":"2026-06-04T20:41:18","date_gmt":"2026-06-04T20:41:18","guid":{"rendered":"https:\/\/stock999.top\/?p=7953"},"modified":"2026-06-04T20:41:18","modified_gmt":"2026-06-04T20:41:18","slug":"bofa-on-the-fundamental-disconnect-in-the-housing-market","status":"publish","type":"post","link":"https:\/\/stock999.top\/?p=7953","title":{"rendered":"BofA on the \u2018fundamental disconnect\u2019 in the housing market"},"content":{"rendered":"

<\/p>\n

American homebuyers have found plenty of villains for today\u2019s brutal housing market: the Federal Reserve, Wall Street landlords, even their baby boomer parents who refuse to move. But Bank of America Research argues the real culprit is hiding in plain sight in your own backyard.<\/p>\n

In a new housing symposium report, BofA Global Research says there is a \u201cfundamental disconnect between housing policy and the underlying supply shortage,\u201d and voters are fixated on the wrong enemies like interest rates and institutional investors instead of a faceless villain: time itself. Specifically, the problem is the decades\u2011long failure to build enough homes. While affordability polls as a top concern, the bank\u2019s policy panel warns the politically painful fixes needed to boost supply remain largely off the table, leaving the market \u201cstuck\u201d even as mortgage rates begin to inch lower.<\/p>\n

Blame the zoning board, not just the Fed<\/p>\n

According to the BofA panel, most housing decisions still live and die at the local level, where zoning rules and \u201cNot\u2011In\u2011My\u2011Backyard\u201d resistance keep new supply from ever getting permitted. <\/p>\n

\u201cMost housing decisions are controlled at the local level, where \u2018Not\u2011In\u2011My\u2011Backyard\u2019 (NIMBY) dynamics and political resistance to new development remain strong,\u201d the report notes.<\/p>\n

That disconnect plays out in how voters explain their own frustration. While affordability \u201cremains a top public concern,\u201d BofA says \u201cmost voters blame interest rates or institutional investors rather than the true issue\u2014insufficient housing supply.\u201d Even federal efforts branded as pro\u2011housing, like the Road to Housing Act, are likely to have \u201conly incremental impact,\u201d mainly by shaving some regulatory friction or funding niche ideas such as modular housing rather than unleashing large\u2011scale building.<\/p>\n

A market \u2018stuck\u2019 by chronic undersupply<\/p>\n

The core BofA view is that today\u2019s affordability crisis is the product of both a one\u2011time shock and a much older failure to build. Post\u20112020, remote work and pandemic migration created a structural demand surge the construction industry simply couldn\u2019t meet: One symposium presenter estimates starts would have needed to jump to roughly 6 million annual units\u2014a 300% increase\u2014to absorb it.<\/p>\n

Instead, supply proved \u201cmuch less elastic than demand,\u201d and home prices jumped more than 40% in about 18 months before a sharp rate shock locked would\u2011be sellers into ultra\u2011cheap mortgages. Existing\u2011home sales are now hovering around 4 million a year, which BofA notes is a roughly 40\u2011year low on a population\u2011adjusted basis, reflecting a frozen resale market and a \u201clock\u2011in effect\u201d that could last six to eight years.<\/p>\n

Why your payment still feels impossible<\/p>\n

On paper, affordability has improved from the absolute trough in 2023 as incomes have risen and mortgage rates drift down from their peak. BofA\u2019s mortgage strategists expect 30\u2011year mortgage rates to move only gradually, from about 6.5% toward roughly 6% by 2027, as the spread over the 10\u2011year Treasury normalizes rather than collapses.<\/p>\n

But in practice, the bank says, housing is still \u201crestrictive in a historical context\u201d: Elevated prices, taxes, and insurance continue to squeeze monthly payments even as nominal borrowing costs ease. That helps explain why the bulk of demand is now K\u2011shaped: Move\u2011up and luxury buyers are still transacting, often using builder buydowns and cash, while first\u2011time and lower\u2011income households are stuck renting and waiting for a reset that never quite comes.<\/p>\n

Wall Street and non-bank lenders aren\u2019t the main story<\/p>\n

BofA also takes aim at another popular villain: big investors and nonbank mortgage lenders. The bank\u2019s research arm has separately argued \u201crestricting big buyers is unlikely to materially affect housing affordability or availability in the near term,\u201d given their relatively small share of the overall housing stock.<\/p>\n

At the symposium, panelists said independent mortgage banks (IMBs) are \u201clikely to retain dominance\u201d in originations because Basel III capital rules and legal risk keep large banks from wading back in in a big way. GSE reform, another perennial talking point in Washington, remains uncertain and distant, making it a poor lever for near\u2011term affordability relief. In BofA\u2019s view, focusing public anger on Wall Street or IMBs risks distracting from the harder, slower work of loosening land\u2011use rules and actually building more homes.<\/p>\n

Why the fix is so politically hard<\/p>\n

The report is blunt the solutions are well understood: Allow more density, speed up approvals, and chip away at local rules that make it expensive or impossible to add housing in high\u2011demand areas. But these are precisely the kinds of changes that generate the fiercest local backlash, even in cities and states that talk the loudest about affordability.<\/p>\n

\u201cAffordability is a key voter issue, but proposals to fix structural supply shortages are politically unpopular and lack short-term payoffs,\u201d the BofA policy panel concludes. That leaves national policymakers reaching for softer tools\u2014modest grants, voluntary zoning pilots, standardized community plan templates\u2014while the core bottleneck in city councils and planning commissions goes largely untouched.<\/p>\n

For this story,\u00a0Fortune\u00a0journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.<\/p>\n

#BofA #fundamental #disconnect #housing #market<\/p>\n","protected":false},"excerpt":{"rendered":"

American homebuyers have found plenty of villains for today\u2019s brutal housing market: the Federal Reserve,…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[245],"tags":[1199,6089,6040,13928,13927,867,33],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/7953"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7953"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/7953\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}