US National Housing Price Index data

Biden's $400 Monthly Homebuyer Credit Sparks Debate Over Housing Market Impact

May 11, 2024, 05:00 PM

Amidst a national housing crisis, President Joe Biden has proposed a new housing plan aimed at improving affordability and increasing homeownership. The plan includes providing a $400 monthly tax credit for first-time homebuyers for two years, amounting to a total of $9,600. This initiative has sparked a debate, with critics arguing that it could inadvertently raise housing prices by increasing demand without addressing the underlying supply issues. They contend that the plan, while potentially boosting short-term affordability, might lead to higher prices and greater market instability, echoing concerns of a repeat of the 2008 financial crisis. Moreover, the plan has been criticized for not addressing regulatory barriers that restrict housing construction, which many believe would be a more effective way to tackle the housing affordability issue.