In his State of the Union Address last night, President Joe Biden addressed the affordable housing issues currently hampering the country, with proposals for change that heartened the National Association of REALTORS® (NAR) and the National Association of Home Builders (NAHB), as well as others.
In a White House Fact Sheet before the address, Biden was to call for a $10,000 credit for first-time homebuyers as well as a $10,000 credit for people who sell starter homes. The measures, which would have to be passed by Congress, are aimed at unfreezing a housing market that has been stymied by elevated mortgage rates and home prices that have frustrated many hopeful first-time buyers.
“I know the cost of housing is so important to you,” Biden said during the address. “If inflation keeps coming down, mortgage rates will come down as well. And the Fed acknowledges that. But I’m not waiting.
“I want to provide an annual tax credit that will give Americans $400 a month for the next two years as mortgage rates come down, to put toward their mortgage when they buy a first home or trade up for a little more space. That’s for two years.
“And my administration is also eliminating title insurance on federally backed mortgages. When you refinance your home, you can save $1,000 or more as a consequence.
“For millions of renters, we’re cracking down on big landlords who use antitrust laws—who break antitrust laws by price-fixing and driving up rents. We’ve cut red tape so builders can get federal financing, which is already helping build a record 1.7 million new housing units nationwide.
“Now pass and build and renovate two million affordable homes, and bring those rents down.”
NAR President Kevin Sears issued this statement following the news:
“The lack of affordable housing supply is hurting the middle class and depriving first-generation and first-time homebuyers of the financial security that homeownership and the American Dream provide.
“NAR first sounded the alarm on this issue with original research showing a nationwide shortage of 5.5 million affordable housing units. We commend President Biden’s commitment to an all-of-government approach to solve this problem. NAR has proposed and advocated for many of these proposals, which together would make serious headway toward fixing this crisis.
“Tax incentives can help close the affordable housing gap, and we are especially grateful for the President’s willingness to explore new tax measures. NAR also supports an all-of-the-above approach to this crisis—from tax incentives to zoning reforms to expanded financing.
“NAR shares concerns of other housing industry groups that other Administration measures, especially in the area of rental housing, run the risk of reducing the supply of affordable rental housing if onerous regulations drive small property owners from the market and discourage future investment. The Administration’s increasing focus on housing production, however, signals a positive turn, as the housing shortage is the root of our affordability crisis.
“NAR compiled and endorsed a suite of policy and legislative proposals to help increase housing supply, including support for the More Homes on the Market Act and the Neighborhood Homes Investment Act, among others.
“Our 1.5 million members stand ready to assist the President and Congress in any way possible to bring this relief to the American people.”
NAHB Chairman Carl Harris attended the address and issued the following statement regarding Biden’s remarks:
“NAHB commends President Biden for acknowledging that homeownership and housing are critical to a strong and prosperous nation and that quick action must be taken to aggressively increase the supply of attainable, affordable housing by building 2 million more homes. With a nationwide housing shortage of roughly 1.5 million housing units, boosting the supply of housing is the only way to tame inflation, achieve a measure of price stability in the for-sale and rental markets, and ease the nation’s housing affordability crisis.
“By announcing several proposals to enable more families to achieve homeownership or have access to suitable rental housing, the president has made it clear that housing is an urgent national priority. NAHB looks forward to working with the administration and Republican and Democratic leaders in Congress to help in this effort by eliminating excessive regulations; opposing restrictive, costly national energy code proposals that will raise housing costs while providing little energy savings to consumers; promoting careers in the skilled trades; and alleviating permitting roadblocks.
“These common-sense solutions will bend the housing cost curve, reduce housing inflation and the overall inflation rate, enable builders to boost attainable housing production and put the economy on a firmer footing.”
