Faced with a shortage of homes that has driven up prices and rents, President Joe Biden's White House on Monday unveiled a plan to improve housing supply and affordability.

Consumer prices are rising at their fastest pace since the early 1980s -- nearly a third of which is due to housing costs -- and Biden has said tackling US inflation is his key priority.

The new plan aims to provide access to credit for homebuilders and buyers, especially low-income families, and assistance to renters, while easing supply constraints for building materials and construction workers.

It also will take steps to discourage the recent trend of investors snapping up many of the available homes, while encouraging state and local authorities to ease zoning restrictions to allow more density, especially multifamily buildings.

"This is the most comprehensive all of government effort to close the housing supply shortfall in history," the White House said in a statement, noting that fewer new homes were built in the decade following the 2008 recession than in any decade since the 1960s.

The problem has been exacerbated since the start of the Covid-19 pandemic as record low mortgage rates and massive government stimulus created a surge in homebuying, while supplies of lumber and other materials were disrupted by the pandemic.

The White House plan will encourage state and local authorities to allow more housing density to help reduc costs that are a big factor in rising inflation The White House plan will encourage state and local authorities to allow more housing density to help reduc costs that are a big factor in rising inflation Photo: GETTY IMAGES NORTH AMERICA via AFP / JUSTIN SULLIVAN

The Case-Schiller Home Price Index showed home prices surged nearly 20 percent in the 12 months ended in February.

And the rapid recovery also created a shortage of workers at all levels.

"Rising housing costs have burdened families of all incomes, with a particular impact on low- and moderate-income families, and people and communities of color," the White House said.

The Housing Supply Action Plan aims to "help close America's housing supply shortfall in five years."

The announcement won praise from the private sector.

"We agree with the White House that the key to resolving our nation's housing affordability challenges is to build more homes," said Jerry Konter, chairman of the National Association of Home Builders (NAHB)

He praised the efforts on "the long-term headwinds, like supply chain bottlenecks and chronic construction labor shortages" that are holding back housing production.