Sunday, April 14, 2024

Biden claims he can solve the problem of houses being too expensive in America. Can he make it happen?

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Americans are facing a serious problem with housing – it’s harder than ever to afford a home. Older generations are holding onto their houses, insurance costs are going up fast, and mortgage rates are extremely high. Half of the people who rent say they can’t pay their monthly rent, and some have given up on ever owning a home.

This issue has been building up for years, and experts agree that it won’t be easy to fix. However, President Joe Biden mentioned in his recent State of the Union speech that the government has a plan.

Biden understands that housing costs matter to people, and he hopes to bring down mortgage rates even before inflation goes down. He doesn’t want to wait and has a plan to help those who want to buy a home.

Advocates for affordable housing support Biden’s plan, which includes new tax credits to make it easier for middle-class folks to buy their first homes. There’s also a tax credit for homeowners who want to sell their starter homes to middle-class families.

The president is asking Congress to pass a law that could lead to the construction and renovation of over 2 million homes, aiming to bridge the gap in housing supply and reduce costs.

Biden believes these measures will tackle the main reasons behind the housing crisis – not enough homes on the market and high mortgage rates. He points out that rent is now 30% higher than before the pandemic, and home prices have gone up by over 40%.

However, not everyone agrees with Biden’s plan. Some argue that offering tax credits will only increase demand for homes without solving the root problem – there just aren’t enough homes available. Critics also say that these incentives could drive up home prices even more.

Housing advocates are pleased that Biden is addressing the challenges renters and homeowners face, calling it the most significant discussion on housing in over 50 years. On the other hand, some in the housing industry worry that tax credits promoting more demand may raise prices further.

While there’s recognition of the housing shortage in Congress, finding a solution isn’t easy. The Federal Reserve, which influences interest rates, can’t do much to fix the under-supply of housing. The current chair of the Fed, Jerome Powell, acknowledges a long-term housing shortage and the impact of pandemic-related factors, but he points out that raising interest rates won’t solve the fundamental problem.

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