U.S. Census Bureau first-time homebuyer statistics

Debate Over Biden's Housing Plan: $400 Monthly Credit May Boost Home Prices

May 11, 2024, 04:58 PM

President Joe Biden's new housing plan has sparked significant debate across various sectors. The plan proposes a tax credit that would provide $400 per month for two years to first-time homebuyers, aiming to make homeownership more accessible and to build equity. However, critics argue that this policy could inadvertently increase home prices by about $9,600, the total amount given to buyers over the two-year period. They contend that the plan does not address the underlying issue of housing supply scarcity and could lead to higher inflation and potentially repeat the housing crisis similar to that of 2008. The policy has been described as a wealth transfer from taxpayers to home sellers, as it might lead sellers to increase home prices to match the subsidy.