In his State of the Union Address (SOTU) last night, President Joe Biden briefly addressed some housing-related issues, namely housing affordability, with proposals for change that industry groups generally praised.
In his speech, Biden called 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 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.”
He also proposed eliminating title insurance on federally backed mortgages, commenting, “When you refinance your home, you can save $1,000 or more as a consequence.”
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.”
Biden also addressed the problem of high rental costs, commenting, “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.”
On this issue NAR shared concerns. “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.”
The National Association of Home builders (NAHB) Chairman Carl Harris attended the address and issued the following statement regarding Biden’s remarks:
“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.
“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.”
