As a whole, it is likely that house prices will rise during Biden’s presidency.
Biden’s Proposed First Time Home Buyers Grant
Biden has stated his intent to create a new tax credit for first-time homeowners of around $15,000. According to Lawrence Yun, the Chief Economist of the National Association of Realtors, this “can go a long way in terms of helping first-time homebuyers and minority households.” By making homeownership more attainable for more young adults and new families, demand will go up. Anytime demand increases — prices follow.
The federal interest rates are currently at a major low point — and many anticipate this to continue. Many buyers will want to take advantage of this, causing home demand to increase even further.
Biden ran his campaign promising a new infrastructure bill that will create thousands of jobs in the clean energy sector. Assuming that this bill passes, we’re likely to see a surge of new jobs — meaning more income for more families and giving more people the stability to buy a home.
It is looking more and more likely that we will see $2,000 stimulus checks in the near future. This will put more money in people’s pockets, boost the U.S. economy, and therefore keep the housing market moving upward. This stimulus could be used toward down payment savings, further lifting demand and prices. We may also see improvements on state and local taxes, which would majorly benefit homeowners in highly taxed areas (CA, NJ, NY). This could produce fewer sales, leaving a high demand to supply ratio and therefore higher prices.
On top of that, Biden may be reducing student loan debt, putting young Americans in a more stable position. According to Stessa, “this coupled with down payment incentives can significantly increase the buyer pool, driving up demand, and prices.”
But, there are risks…
Of course, there is no way to be certain about which direction home prices will go. The housing market is delicate and can be easily disturbed by things that can’t…