Biden’s $10,000 housing credit doesn’t help
By
Tiana Lowe Doescher
March 22, 2024 3:04 pm
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While inflation has corroded the economy across the board, with prices up 18.5% overall, no market has spiraled quite as out of control as housing. As I detailed in the last installment of Tiana’s Take in the Washington Examiner magazine, unlike the rest of the economy, where the Federal Reserve’s monetary tightening has succeeded in massively slowing price hikes, average and median home price sales have only fallen by 11% in the past year despite skyrocketing by 48% from the peak of the pandemic to the beginning of 2022.
President Joe Biden has offered a solution in search of a problem because he is either unwilling or unable to understand that while local zoning laws are responsible for constraining supply, his fiscal policy is to blame for the Fed’s necessary response of the highest federal funds rate in 23 years, which in turn results in the some of the highest mortgage rates in two decades.
To exacerbate the worst-of-both-worlds mismatch between supply and demand in the housing market, Biden has bragged he will offer $5,000 per year for two years to first-time, “middle-class” homebuyers and a one-year credit for $10,000 for families who sell their so-called starter homes. The White House boasts that the former proposal, which was announced during Biden’s State of the Union address, would be tantamount to lowering a buyer’s effective mortgage rate by at least 1.5 percentage points.
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https://www.washingtonexaminer.com/opinion/2933921/bidens-10000-housing-credit-doesnt-help/
