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MADISON, Wis. – Providing more “affordable housing” is a popular campaign slogan these days in Wisconsin and across America, but it’s not as simple as proclaiming the goal and wishing it into reality. A mix of factors make it harder for people to find the shelter they want or need – but untangling those economic knots can make housing more “attainable.”

That was a core message Wednesday to the annual Wisconsin Economic Forecast Luncheon, where the chief economist for the National Association of Home Builders laid out an array of issues that are tugging in opposite directions on the “supply and demand” curve for housing of all types.

Robert Dietz, who has analyzed public- and private-sector economic trends over time, told a Madison crowd of several hundred people that a combination of issues has increased housing prices and crimped supply. Here are some:

  • Regulations of all types, mostly state and local, raise housing costs by adding time and headaches to the design-build process. Expanded building codes, land set-asides, fees and new environmental standards now approach one-quarter of the cost of a new home. “It’s the death by 1,000 cuts. It’s too hard to build anything, anywhere in the country,” Dietz said.
  • Tariffs are boosting material costs, such as aluminum and copper. “Tariffs don’t work.” Dietz said.
  • Energy costs are soaring, especially since the Iran war began. Higher energy costs chip away at U.S. productivity growth, which is already predicted to be mostly flat for the remainder of 2026.
  • Government spending is adding to the national debt and keeping interest rates higher, which may explain why the Federal Reserve Board once again declined to lower the core interest rate. “If we care about things like 6%-plus mortgage rates,” he said, federal spending must be controlled.
  • Demographics are working against millennials (potential homeowners ages 25 to 34) because “baby boomers” are holding on to their homes longer and the U.S. home price-to-income ratio remains high. That index is a key indicator of affordability for younger workers.
  • A related factor for some young people is that some consumer loans are “seriously delinquent,” he said, including student loans. That makes landing a mortgage harder.
  • “Skilled workforce development is where it’s at,” Dietz said as he unveiled a chart showing the percentage of immigrant workers – legal or otherwise – in various construction trades nationwide. In Wisconsin, the share is about 8%.
  • Federal industrial policy has taken a turn that causes free-market economists such as Dietz to shudder. The government has acquired direct ownership stakes in some private companies. A potential $500 million bailout of Spirit Airlines is the latest example.
  • Just like many people these days, markets can react to the non-stop nature of unsettling headlines. “A little less governance by social media would help,” Dietz said.

These factors and more don’t fall equally on all housing sectors nationwide – nor do they fall equally state-to-state or communities within a state.

Apartment construction has fallen off in some parts of Wisconsin but not others. Single-family building permits are up so far this year in both Milwaukee and Madison. Townhouse construction gains continue nationally. Single-family “built to rent” construction had been on the rise, Dietz said, but pending legislation in Congress could all but shut that down.

Residential remodeling has trended up since the peak Covid year of 2020 and will likely continue, he said.

Is the housing crunch a complicated picture? Yes, but Dietz believes there are ways to stabilize housing costs relative to general consumer inflation. The “shelter” component of the Consumer Price Index has accounted for more than half of the U.S. inflation increase over the last three years

“If we want to get back down to 2% inflation, there’s one simple way to do it – more attainable housing,” Dietz said. “For sale, for rent, single-family, multi-family, and improving the existing housing stock.”

Simple goal, harder to achieve.

Still is past president of the Wisconsin Technology Council. He is an adviser to Competitive Wisconsin Inc., a non-profit policy group.