The president will unveil a slew of new housing initiatives during his State of the Union address on Thursday, including a two-year tax credit of $5,000 per year for first-time homebuyers and a one-year tax credit of up to $10,000 for families selling their homes. starter room.
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President Biden will announce a slew of new housing initiatives during his State of the Union address on Thursday. White House announcedwhich would include tax credits to help alleviate high mortgage rates for first-time buyers and encourage existing homeowners to put their new homes on the market.
Through the proposed program, “middle-class first-time homebuyers” would receive a tax credit of $5,000 per year for two years. The White House said that in total, this credit can reduce mortgage rates for mid-priced homes by more than 1.5 percentage points, and has the ability to help more than 3.5 million middle-class potential buyers buy their first home in the next two years. The announcement did not specify how “middle-class homebuyers” are defined.
Biden will also ask Congress to pass legislation that would provide a one-year tax credit of up to $10,000 to households selling a new home if it is below the county’s median home price, hoping to free up the incentive to make inventory more affordable. .
Much of the mid-priced inventory is stuck, with buyers buying during the pandemic unwilling to give up 2% and 3% mortgage rates in the process of purchasing a new home.
This comes after the Biden administration took steps to build more homes, lower high rents and help first-generation homebuyers with down payments.
Barriers to homeownership, including high mortgage rates, high home prices and rents, and low inventory, remain a problem for many Americans and will become a key issue during the 2024 election.
“This plan is the most important set of housing proposals in a State of the Union address in over 50 years, and I say that because I’ve looked at them all,” said former Congressman David DeVoe, president and CEO of the National Housing Conference David Dworkin said.Finance Ministry officials told Washington post.
However, some market experts say the new tax credits could create more demand and drive up home prices further.
“The impact on home prices is likely to be very limited — generally speaking, increasing the number of home buyers increases home prices for everyone,” said Kyle Pomerleu, a senior fellow at the American Enterprise Institute, a think tank. Washington post. “It’s very simple.”
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