The Joe Biden administration has officially taken over the White House operations when the economy is trying to recover from the negative impact of the COVID-19 pandemic. They expect the Democrats to initiate significant policy changes in various sectors, including the U.S housing market. As a result, all homeowners, prospective homebuyers, and renters should benefit once the existing COVID-19 relief programs are improved.
The following are some of the housing-related proposals the Biden administration is planning to push forward.
1. Extending the eviction and forbearance protection period
When the Coronavirus pandemic hit the economy, many Americans lost their jobs and income. In March 2020, the federal government passed a mortgage forbearance policy that allowed homeowners who were servicing mortgages issued by Fannie Mae and Freddie Mac to pause their payments for up to 360 days.
The intervention aims to help struggling homeowners avoid foreclosures and struggling renters by granting them an eviction moratorium to expire on January 31st, 2021. The positive thing is that the Biden administration has already issued an executive order extending eviction and foreclosure moratorium.
The mortgage forbearance period for federally-backed mortgages has also been extended to March 2021 to boost the recovery process. Renters’ moratorium has also been extended by 1-2 months. Biden administration is also proposing to Congress to provide an additional $30 Billion towards another rental assistance package.
2. Boosting affordable housing
Currently, the U.S housing market is experiencing a massive housing shortage that cuts across all price spectrum. Most homebuilders were negatively affected by the low demand for houses when the pandemic started, and they have not been able to get back into the real estate business.
Biden administration has shown a commitment to the construction of affordable houses. The historic low mortgage interest rate drives demand for homes for sale, and the market is struggling to fill the housing shortage gap.
To boost the affordability of available homes, the Biden administration is also proposing a tax credit of $15,000 for first-time homebuyers. The tax credit can cover part of your down payment or closing costs.
In U.S real estate market, the biggest hurdle to building more affordable housing has always been the existing local restrictions in various neighborhoods. However, the Biden administration under the Department of Housing and Urban Development promises to allocate more funding to the Home Investment Partnership Program. The program’s main objective is to issue grants to state and local governments to boost their efforts in creating affordable housing for low-income earners.
3. Boosting property value
The historic low mortgage interest rate is increasing the demand for affordable homes. All the other policies that the Biden administration is pushing to enable prospective home buyers to acquire their dream homes are positively impacting current homeowners.
Home sellers will probably fetch better prices in the first market quarter due to the ever-increasing competitive market and low supply of listed homes.
Joe Biden’s administration is committed to improving the previously enacted relief programs to stabilize the housing market during the COVID-19 pandemic. Supposing all these proposed housing plan agendas are approved. In that case, homeowners and prospective homebuyers are going to benefit immensely as the Biden administration tries to re-shape the current U.S housing market.