The Biden administration announced on Thursday that it plans to assist hundreds of thousands of households in realizing their dream of homeownership as part of an attempt to cut housing costs, boost the supply of affordable homes, and alleviate the rising cost of buying a home for Americans. It would “promote homeownership for an additional 500,000 households while increasing neighbourhood revitalization investments,” Lael Brainard, director of the White House’s National Economic Council, said in a speech Thursday urging Congress to act on the Neighborhood Homes Investment Act. The act will introduce a new federal tax credit to help fund “the development and renovation of 1-4 family housing in distressed urban, suburban, and rural neighbourhoods,” according to a draft of the bill.
The housing market is in a tailspin, exacerbated by the Federal Reserve’s efforts to combat historic inflation
Senators Ben Cardin, a Democrat from Maryland, and Todd Young, a Republican from Indiana, presented legislation earlier this year that they said could help 500,000 houses and create $125 billion in development money over the next decade. The housing market is in a tailspin, exacerbated by the Federal Reserve’s efforts to combat historic inflation. The Fed’s frequent rate hikes since the 1980s have contributed to higher borrowing costs for home buyers. Mortgage rates have risen to two-decade highs, while property prices have risen and availability has decreased.
President Joe Biden, according to Brainard, will not wait for Congress. For example, the administration has stated that it is pressing for zoning modifications that will facilitate the construction of affordable housing. “Our Department of Transportation is making billions of dollars in low-cost loans available for developing housing near transportation,” Brainard said in a statement. The administration has also attempted to assist first-time purchasers who have struggled to acquire a foothold in the housing market. According to a recent NerdWallet report, home prices were roughly 6 times the median potential first-time homebuyer income in the third quarter.
Biden has suggested a scheme of down payment support for first-time home purchasers in his budget
The White House pointed out that it was trying to reduce costs for first-time buyers through the Federal Housing Administration program. The effort, it said, helped reduce mortgage insurance premiums by 0.3 per cent. “This will mean savings of around $1,200 per year for a homebuyer buying a median home,” Brainard said.
Biden has suggested a scheme of down payment support for first-time home purchasers in his budget, which the White House claims will help first-generation homeowners. “[The program] may help make homeownership a reality for families who have not benefited from previous generational wealth building through homeownership.” “Passing this legislation could help to close the persistent racial disparities in homeownership,” Brainard added.
The White House also stated that it was looking for ways to assist tenants. According to Brainard, the administration has assisted 100,000 low-income households in securing rent guarantees at 30 per cent of their income. “The president’s budget proposes expanding rental assistance to more than 200,000 additional households, including a first-of-its-kind rental assistance guarantee for low-income veterans and former foster youth,” she said.