Well… as 2020 barrels on we have one less thing to worry about as the election season has come to an end. It was a stressful and much longer election process than we are accustomed to but it seems to be settled for the time being and we can turn our attention back to the usual hustle and bustle. We are collectively moving forward regardless of how we may lean politically and thus we are preparing for a changing of the guard. This incoming change of the status quo leaves us with a number of questions, namely how this change will affect the housing market and the U.S. economy as a whole.
Research shows that President-elect Joe Biden will inherit a unique housing market with record-low interest rates, high home prices, and a shortage of home inventory. One thing for sure is that Biden will push to make housing more affordable for low and middle-income Americans. Biden’s campaign released a housing plan in excess of $600 billion dollars including a clause that will make buying a home especially attractive for first-time homebuyers. The soon to be president’s plan includes an option for first time home buyers that will give prospective buyers “a down payment tax credit of up to $15,000”, which can be applied at the time of purchase. Some of the citizens that are most likely to receive such credit are teachers, first responders, and national service workers. While this may seem like a great first step to helping Americans that fit into such a category, it is worth noting that these people may only receive assistance if they are interested in pursuing the purchase of a home in a low or middle-income area.
While there are some stipulations to this proposed plan, there are some aspects of the plan that are still uncertain because of the current timeline. The proposed housing plan sounds great for potential first-time homebuyers and it may in fact end up being exactly what they want. However, there is still some uncertainty about whether it will apply to multi-family homes, if any additional groups will be included and which exact areas will be included. Furthermore, the exact date of such a policy change is still murky as there are many issues up in the air such as the transition between the Trump and Biden campaigns and of course the ever complicating issue of the COVID-19 crisis. A few things are certain. First, this is a tax credit. The tax credit is applicable to a number of groups the Biden campaign feels, needs and deserves more help applying for and attaining more affordable housing in the near future. Second, regardless of how we may lean politically, it is advisable to take advantage of the change and make it work, wheter you’re an investor or homeowner.
The bottom line is this, if you are a prospective first-time homebuyer, now is a fantastic time to buy a home regardless of where you are buying. The housing market like many markets is cyclical in nature. Keeping this in mind, the record-low interest rates will not last nor will the makeup of the housing market as a whole. As always making an informed decision is the best way to minimize risk and to make your money work for you.
Sources: themreport.com “How President-Elect Biden Might Alter the Housing Market”