Federal Reserve Governor Michael S. Barr Discusses Housing Affordability (Local Communities Count)

Septbeber 24th, 2026

ESCANABA MI-Federal Reserve Governor Michael S. Barr’s recent speech on housing affordability raises an important issue for communities and hometowns: where wealth, opportunity, and decision-making are concentrated can have a significant effect on local economic development.

For communities to remain strong, local businesses, downtowns, and residents need opportunities to participate in economic growth. When wealth and investment become increasingly concentrated, smaller communities can lose businesses, housing opportunities, and some of their ability to shape their own economic future.

Housing affordability is an important part of that equation. Programs that help communities reinvest locally, expand housing options, support small businesses, and encourage private investment can strengthen the economic foundation of a hometown.

These efforts are not a complete solution. They are, however, part of a broader conversation about how communities can create opportunity and ensure that economic development benefits more than just a small portion of the population.

A strong downtown, a healthy small-business sector, and affordable housing can give residents a greater opportunity to participate in—and benefit from—the economic life of their community.

Housing Affordability Faces Long-Term Challenges

• Federal Reserve Governor Michael S. Barr said housing affordability has deteriorated significantly, with high home prices, mortgage rates, rents, insurance costs, and property taxes putting pressure on households.

• The Atlanta Fed’s housing affordability index fell to 68 in July 2026, its lowest level in 21 years. Barr noted that real home prices have risen much faster than household incomes since 2000.

• Barr identified limited housing supply as a major contributor to high prices, with estimates of the national housing shortfall ranging from about 2 million to 5.5 million units.

• Construction productivity has grown slowly, while shortages of skilled workers, higher material costs, regulations, and the long recovery from the 2007–2009 housing downturn have constrained new housing production.

• Barr highlighted public-private partnerships, the Community Reinvestment Act, the Low-Income Housing Tax Credit, modular construction, financial innovation, and local efforts to reduce regulatory barriers as potential tools for expanding affordable housing.

Barr, M. S. (2026, September 23). A long-term view on the costs of shelter [Speech]. Board of Governors of the Federal Reserve System. https://www.federalreserve.gov/newsevents/speech/barr20260923a.htm