10 Million Homes Missing: White House Says Deregulation Could Add 13.2M Houses

The White House diagnosis: a 10 million-house shortfall and a policy prescription

The White House report lands like a splash of cold water for anyone tracking the property market USA: Republican economists at the Council of Economic Advisers estimate a shortage of 10 million homes across the country. That number is headline-grabbing and politically useful, and the administration is pushing the argument that cutting regulatory costs can be the quickest way to expand supply, steady housing prices and lift growth.

This is not a dry, technocratic paper. It touches on politics, party strategy ahead of midterms, and concrete figures that matter to buyers, investors and developers. The report ties the supply gap to a post-2008 collapse in homebuilding and to what it calls a "bureaucrat tax" on new construction. It argues that regulatory costs add more than $100,000 to the cost of building an average house and that, if reduced, construction could expand by as many as 13.2 million homes.

In our analysis, those numbers demand scrutiny. They are compelling but they do not answer how fast, where, or at what trade-offs the extra housing would arrive. Yet the report does set out a clear political and policy frame worth understanding if you own, buy or invest in US real estate.

What the report actually says: key figures and assumptions

The housing chapter of the Economic Report of the President, prepared by the White House Council of Economic Advisers, is both a policy document and a campaign tool. Here are the facts the report places front and center:

• Shortage estimated at 10 million houses relative to a counterfactual where single-family homebuilding continued at its historical pace rather than falling after 2008.
• Regulations and compliance changes, described as a "bureaucrat tax," are estimated to add more than $100,000 to the cost of building each home.
• If regulatory costs were reduced, the analysis says construction could produce up to 13.2 million additional homes.
• That boost in homebuilding could add on average 1.3 percentage points to annual economic growth over the next decade and support 2 million manufacturing and construction jobs.
• Since 2000, home prices are up 82% while incomes are up 12%, a mismatch the report highlights as a driver of affordability problems.

The report also criticizes Biden-era energy efficiency housing standards as contributors to higher upfront construction costs, citing a 2021 NAHB estimate that these standards could add up to $31,000 to the price of a new home and that payback could take decades.

Finally, the report notes mortgage rates have jumped in recent months, with average 30-year rates moving to about 6.37%, a level that matters to buyer affordability and demand.

The policy toolbox: what the White House is proposing

The administration has used two concrete actions and signaled several others. The report and subsequent statements indicate a menu of potential federal interventions.

• Executive orders issued in March direct federal agencies to reduce housing regulatory burdens and to make it easier for smaller banks to provide mortgages.
• The administration has authorized purchases of mortgage-backed securities as a tool to stabilize mortgage markets and support liquidity.
• Officials have suggested making federal funding to state and local governments conditional on reducing certain regulatory barriers, particularly zoning and permitting rules.
• The report urges scrutiny of building codes, compliance costs, fees and some energy-efficiency mandates that add to upfront costs.

These measures are a mix of administrative and leverage strategies. They stop short of federalizing zoning law, which remains under state and local control, but they rely on conditional funding and administrative re-interpretation to push change.

Practical implications for buyers, investors and developers

What do these proposals mean on the ground? Here we separate short-term signaling from realistic outcomes over a typical development timeline.

Short-term signals

• Political focus on housing can lower perceived regulatory risk for markets and may improve sentiment in the residential construction sector.
• Executive orders and MBS purchases are policy signals that may ease credit flows for some buyers, especially where smaller banks expand mortgage lending.

Medium- to long-term effects (what we actually expect)

• Even under the report's optimistic scenario, building millions of homes is a multi-year process. Permitting, site acquisition, financing, labor availability and supply chains are not flipped by a single memo.
• Developers will be the first to benefit from reduced fees or simplified codes, but those savings do not automatically translate to lower sale prices. Local market dynamics and demand conditions determine pricing.
• Energy-efficiency rollbacks may cut upfront costs for a new home but can raise lifetime operating costs for homeowners, a trade-off that buyers and lenders will weigh.

For investors

• Opportunities: Markets with tight supply but flexible local regulation could see accelerated approvals and above-average permit growth. Multifamily developers and build-to-rent operators may benefit from a policy push toward more construction.
• Risks: Policy uncertainty (legal challenges to federal interventions, variability across states) and interest-rate volatility are immediate risks. The current mortgage rate environment at approximately 6.37% reduces buying power and can cap price appreciation.

For buyers

• Buyers under 40 face a historic affordability squeeze given that prices rose 82% since 2000 while incomes rose 12%. Any policy that meaningfully grows supply would help, but gains will take time.
• If the administration pushes to keep prices high to protect existing owners — a position the president has publicly supported — younger buyers may see limited relief.

For builders and contractors

• Reducing regulatory friction could lower per-unit costs and improve margins, provided demand holds and material/labor costs do not rise. The report's claim of $100,000+ per home in regulatory costs is an assertion industry players will contest and try to quantify locally.

Zoning, codes and the contested case of energy standards

Two intertwined issues are central to the debate: zoning and building standards. The report targets both.

Zoning and local approvals

• Much of the added cost and delay in delivering new housing comes from local zoning rules, parking minimums and protracted permit processes. These elements increase both time and money required for development.
• The federal government cannot rewrite local zoning, but it can use federal funding as leverage. Conditioning grants or highway dollars on zoning reform is politically fraught and will provoke legal and political resistance in many states.

Energy and efficiency standards

• The report singles out recent federal efficiency standards for appliances and related ductwork as a source of higher upfront costs. It draws on a 2021 National Association of Home Builders analysis estimating a possible $31,000 add-on per home and a multi-decade payback period.
• Rolling back efficiency standards reduces initial price tags but increases utility bills over time. For buyers with tight budgets, lower upfront cost can be decisive; for long-term owners, higher efficiency reduces lifetime housing expense.

Legal context

• The enforcement and scope of new federal standards are already subject to lawsuits.