Zillow Group CEO Jeremy Wacksman delivered a blunt diagnosis of America's housing crisis: lower mortgage rates won't save you. The real problem is that there simply aren't enough homes.
Speaking on Yahoo Finance's Opening Bid, Wacksman laid out numbers that should alarm anyone trying to buy a first home or move into something bigger. Home prices have surged 60 to 80-plus percent from pre-pandemic levels, and even more in some markets. A full percentage point drop in mortgage rates barely dents the monthly payment when the sticker price has already run that far ahead of wages.
"If mortgage rates come back down, even a full point, it's not that much savings on your mortgage payments because home prices have run up so much. Home prices are up 60, 80-plus percent from pre-pandemic levels, more in some markets. And the solution to that is more supply."
He's right. And the reason supply remains strangled has almost nothing to do with the free market.
According to Yahoo! Finance, for decades, local governments across the country have layered zoning restrictions, permitting bottlenecks, and regulatory hurdles so thick that building new housing in many metro areas takes years longer than it should. Every added month of review, every arcane setback requirement, every neighborhood council veto translates directly into higher costs passed on to buyers.
Wacksman pointed to the solutions that conservatives have been championing for years: relaxing zoning, streamlining permitting, fast-tracking modular construction, and adopting pre-approved building designs. As he put it:
"It is a lot of programs to relax zoning and permitting and fast track modular and pre-approved designs, and really work at the local level to get building in affordable housing going faster."
Notice where the work needs to happen: the local level. Not another federal spending package. Not another subsidy program that inflates demand while doing nothing about the supply chokepoint. The obstacle is government red tape, and the fix is cutting it.
Washington loves to talk about "affordability" as if it's a knob the federal government can turn. Propose a new tax credit, expand a lending program, or throw money at demand. Every time, the result is the same. More dollars chasing the same inadequate number of homes pushes prices higher, and the people those programs were supposed to help end up further behind.
Wacksman's framing cuts through that illusion. Lower mortgage rates "help a little," he conceded, but they are "only a piece of the buyer affordability story." When the underlying asset has appreciated 60 to 80-plus percent in roughly five years, shaving a point off the interest rate is rearranging deck chairs.
The math is simple. If you couldn't afford a $300,000 home in 2019 and that home now costs $500,000, a slightly cheaper mortgage doesn't close the gap. Only more homes on the market do.
The cities where housing costs have exploded the fastest share a common trait: they are governed by people who talk endlessly about housing justice while maintaining the regulatory apparatus that prevents housing from being built. San Francisco, Los Angeles, New York, Seattle. Blue-city zoning boards block development proposals in the name of "community character" and "environmental review," then blame landlords and investors when young families can't find a place to live.
The contradiction is staggering. The same political class that demands more affordable housing fights every practical measure to create it. They prefer subsidies because subsidies create dependence and expand bureaucratic empires. Deregulation, by contrast, empowers private builders to meet demand without a government middleman. That's precisely why the left resists it.
The playbook Wacksman described isn't theoretical. States and localities that have loosened zoning rules and cut permitting timelines have seen results. Modular and factory-built housing can dramatically reduce construction costs and timelines when regulators get out of the way. Pre-approved designs eliminate months of redundant review for structures that have already been vetted.
None of this requires a new federal agency. None of it requires higher taxes. It requires local and state officials to stop protecting entrenched interests and start letting builders build.
The CEO of the country's largest real estate platform just told America what conservatives have been saying for years: government is the obstacle, not the solution. The question is whether the people who control zoning boards and permitting offices are willing to listen, or whether they'd rather keep the crisis alive and the campaign talking points flowing.
Sixty to 80-plus percent. That's how much harder it got to buy a home while officials debated, regulated, and did nothing. Every month they delay is another family priced out.