News of the Day May 5, 2026
Economist Says Boosting Housing Stock is Key to Lowering Inflation

Lowering construction costs to boost U.S. housing inventories will be key to reducing inflation, a top national economist told attendees of the Wisconsin Economic Forecast Luncheon.

Robert Dietz is the chief economist and senior vice president for economics and housing policy for the National Association of Home Builders.

“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.”

He noted inflation was trending down toward the Federal Reserve’s target of 2% before the conflict in Iran occurred, leading to spiking energy costs and driving inflation back up to 3.3%.

Even before this latest destabilizing global event, the shelter component of inflation — covering housing, rent and homeownership — has made up more than half of the total increase in consumer inflation for the last three years. He argued that’s a result of the cost of construction being too high relative to household incomes.

“My message to policymakers in DC and statehouses everywhere is reduce the cost of construction, increase the amount of available inventory in the housing market, and you’ll be able to land that plane faster,” Dietz said.

Scott Hodek, an economist with the state Department of Workforce Development, noted in a follow-up panel that high energy prices of any kind are a drag on economic growth.

“It doesn’t matter what business you’re in, energy is one of your inputs,” he said yesterday. “And so higher energy prices means your input price has gone up. What do you generally do when that happens? Probably pass that along to consumers, if you can.”

That results in lower discretionary spending, he noted, adding “it ripples throughout the economy” and presents a real problem for further growth.

Tim Schneider, president and CEO of Bank Five Nine in Oconomowoc, agreed that poses a problem in Wisconsin, noting manufacturers that aren’t able to pass on costs through a fuel surcharge are facing a “squeeze” on profitability.

He predicted sluggish growth for the rest of the year, and also pointed to possible regulatory changes on the horizon — though that depends heavily on how coming elections play out.