Raines Says Housing Shortage in the Offing

Fannie Mae chairman Franklin Raines isn't worried about a housing price bubble, which he says is nothing but a bunch of hot air. But he is concerned about the country's housing supply."If supply falls too far behind demand, we could wind up with a widespread housing affordability crunch or even a national housing crisis," he said at the National Association of Home Builders convention. Addressing the NAHB's Executive Board, Mr. Raines said the "one major caveat" regarding what Fannie Mae has labeled the "American Dream Decade" is a lack of new and affordable homes for people to buy. Because of land constraints and growth restrictions, he warned, builders will have a tough time erecting the 1.6 million new houses needed annually through the remainder of the decade to meet the projected growth in households. Calling the lack of buildable land the "biggest constraint on housing today," he said the cost of land has gone up in every place where growth control measures restrict development. From California to North Carolina, Mr. Raines said, "the examples are everywhere."