Housing instability and affordability is a serious problem in America. The novel coronavirus pandemic, the negative effects of climate change, and a movement to fight racial injustice have brought America’s long-lasting housing issues to the forefront. Luckily, the Biden-Harris ambitious housing agendas might bring optimism to the real estate market.
During campaigns and after winning the election, Joe Biden has been speaking about housing-linked issues. And the big question is, in what ways will the Biden-Harris administration affect the real estate market? Let’s look at some key points.
Keeping low-interest rates
People seeking refinancing or mortgage consider interest rates, which have been low in the recent past. The Biden-Harris administration will continue this trend. Typically, the interest rate is unlikely to increase with a limited housing inventory and a delicate economy due to the coronavirus pandemic.
With low-interest rates, borrowing will be more affordable and this will also lure more people into buying homes. The real estate market will witness an increase in the volume of sales and mortgages will remain high.
Providing housing investment
The Biden-Harris administration has promised to invest $640 billion in real estate to ensure that each American accesses affordable, safe, and stable housing in the next decade. The housing promised also provides access to good schools. The administration calls for the adjustment of zoning laws, improving the regulation of agencies, introducing tax credit ($15,000) for first-time people buying homes, and building affordable housing.
Some of these plans can lead to an increase in the supply of more affordable housing. However, a housing plan like tax credit might put pressure on the real estate market because of the limited inventory. More individuals will compete for limited houses and such a move is likely to increase home prices.
Strengthen tenant protections
The Biden-Harris administration has proposed to strengthen tenant protections to prevent evictions. Besides investing an additional $30 billion to fund emergency rental and provide water and energy for struggling families, the administration will inject about $5 billion to help Americans experiencing the risk of homelessness.
The Biden-Harris administration has an ambitious real-estate plan for Americans. It plans to ensure that no more than 30% of your income is used for housing. It will create more opportunities to ensure that middle- and low-income earners afford housing or become homeowners. Therefore, the real estate market will be vibrant, though with challenges like competition for limited houses.