Staff Reports
In a bold move, President Joe Biden announced a new set of housing affordability plans just before his big State of the Union speech. But hold onto your hats, folks, because some experts are saying these proposals could actually make the whole situation worse by completely ignoring the underlying supply issues. Yikes!
Biden $5,000 mortgage credit proposal could boost demand, raising home price pressures https://t.co/RDG5PruyrX
I have a better idea (seriously), below.
— Ken Cuccinelli II (@KenCuccinelli) March 11, 2024
Biden wasn’t holding back when he called for higher taxes on the wealthy and corporations, but that’s not all, folks! He also addressed the need to make housing more affordable. With soaring mortgage rates and skyrocketing home prices, he’s got a point—buying a home is starting to feel like winning the lottery. The struggle is real, people!
The big cheese himself, Biden, is on a mission to help out the average Joe, proposing a $5,000 tax credit for middle-class first-time homebuyers for a solid two years. Plus, he threw out a $10,000 credit for those who sell their starter homes. The administration claims this is a response to the decrease in supply caused by pandemic-era homebuyers who are keeping their homes off the market due to those pesky high mortgage rates. But hold onto your horses, some experts are warning that these ideas could actually backfire and send home prices even higher. Gulp!
According to Mark Calabria, a former big shot at the Federal Housing Finance Agency, this Biden plan is like pouring gasoline on a fire. He’s yapping about how these proposals are only going to jack up demand without doing anything to fix the real issue—supply. It’s like Econ 101, people. If you boost up demand without increasing the goods, you’re just setting yourself up for higher prices. It’s like trying to get your hands on the latest video game console—good luck!
The housing market has been groaning under the weight of a chronic undersupply for years, and now with those pesky mortgage rates rising, it’s like adding insult to injury. Economists are saying we’re short anywhere from 2 million to a staggering 20 million houses. That’s like trying to find a needle in a haystack! But hold onto your hats, because Calabria is not letting up. He’s saying even the parts of Biden’s plan that seem like they’d help supply, such as a tax credit for builders, are basically useless. According to Calabria, all that would do is let builders throw even more cash at developable land, which is about as rare as a unicorn.
But that’s not all, folks! Biden is also throwing down the gauntlet on “rent gouging” by those so-called “corporate landlords.” Calabria is warning that this move could actually make things worse by scaring off landlords and jacking up rents even higher. It’s like trying to fill up your gas tank when prices are already through the roof—it’s a tough break!
And as if that wasn’t enough drama, there are some affordable housing advocates and housing sector folks who are cheering Biden on. David Dworkin, the head honcho at the National Housing Conference, is singing Biden’s praises, calling this the most game-changing State of the Union address on housing in over 50 years. But on the flip side, Ed Pinto, a big shot at the conservative American Enterprise Institute’s Housing Center, is giving Biden’s plan a big thumbs-down, saying it’s just going to jack up demand and turn the market into a house price and rent rollercoaster. Talk about a divided house!
With all this bickering, it seems like Biden’s housing plan might be up the creek without a paddle when it comes to actually getting anything done in Congress. But hey, at least we can all sit back and chew the fat about it while nothing gets accomplished—because, life, uh, finds a way!
