U.S. Housing Market remarks by President Biden State of The Union Address March 7, 2023

President Biden spoke on the U.S. Housing Market in tonight’s State of The Union speech.

Here’s a breakdown of what he said and my thoughts as someone who has a busy real estate practice.

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• Biden claims the Fed acknowledges that as inflation comes down, interest rates will come down.

Note: When FED lowers rates, yields will drop causing mortgage rates to fall. When FED raises rates, yields increase and mortgage rates rise. When Bonds rise, interest rates go down and vice versa.

• Biden wants to provide an annual tax credit of $400 a month ($4,800/yr) for the next 2 years as mortgage rates come down. States this it to put towards their mortgages when they buy their first home or trade up for a little more space. ��In 2023, the median monthly mortgage payment was $2,268 (Median new home sales price of $426,167) with a 7% rate, whereas in 2021 the median payment was $1,525 (median new home sale price of $396,800) at 3.15%. This would definitely help bridge the gap for those looking to make a move.

Note: I think this is a great incentive for homeowners looking to move-up or downsize and HUGE for first-time home buyers looking to purchase. Can this admin Deliver?

•Eliminating title insurance of federally backed mortgages when refinancing your home.

Note: What happens if there is a title claim against the property from a previous owner/possible heir and there is no owner’s title insurance on the property?

•For renters, cracking down on big landlords who break anti-trust laws by price fixing and driving up rents.

Note: This is a topic that can be discussed at great length. Big corporations own approx. 25% of residential properties and 50% of multi-families.

•Admin has cut red tape to Builders who are getting federal financing to build a record 1.7 million housing units nationwide.

Note: This is a false claim. 2006 had 1,800,900 housing starts. 2005 had 2,068,300 starts, 2004 had 1,955,800 housing starts

Source: US Census Bureau�Link: https://ipropertymanagement.com/resea...

•Looking to build & renovate 2 million affordable homes to help bring rental rates down.

Note: We do have a significant lack of inventory and affordable homes are necessary. Will these be tiny homes? Multi-families? How will this be accomplished with the cost to build?
�What are your thoughts on the statements made by President Biden. Pros/Cons? Let me know in the comments!

#biden #stateoftheunion #housing