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Home » News » Housing Crisis: Biden targets mortgage, rent burden with tax credit, but will it work?

Housing Crisis: Biden targets mortgage, rent burden with tax credit, but will it work?

  • / Updated:
  • Staff Report 

In his recent State of the Union address, President Joe Biden laid out a series of measures aimed at alleviating the housing affordability crisis in the United States. Amidst a backdrop of rising mortgage rates, escalating home prices, and increasing rents, Biden’s proposals seek to provide significant relief for both homebuyers and renters.

Highlighting the struggle of many Americans to afford housing, Biden pointed to the median home price’s climb to $379,100—a 5.1% increase from the previous year. This surge in prices has contributed to the decline of first-time homebuyers in the market.

Rosendale, New York

To combat these challenges, Biden proposed a mortgage relief credit that would offer a $5,000 annual tax credit for two years to first-time middle-class homebuyers. This initiative aims to reduce mortgage rates by over 1.5 percentage points, potentially aiding more than 3.5 million families in purchasing their first home. The plan addresses the current scenario where the majority of mortgage holders are locked into rates below 5%, disincentivizing them from selling and upgrading their homes due to higher current rates.

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In addition to mortgage relief, Biden called on Congress to legislate the construction and renovation of over 2 million homes to address the shortage of housing inventory, which has contributed to the soaring costs of renting. National rents have surged by 29.4% since before the pandemic, with the President’s building plan poised to potentially reduce rental prices by increasing supply.

The White House is also taking action against price gouging in the rental market. A newly formed anti-price-gouging “strike force” aims to tackle unfair practices and illegal pricing, specifically targeting large landlords and private equity firms accused of inflating rents through price fixing.

Biden’s housing proposals represent a concerted effort to tackle one of the most pressing issues facing Americans today. By addressing both the affordability of purchasing homes and the cost of renting, these measures aim to provide much-needed relief to millions of families struggling to keep up with the escalating costs of housing.

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