Biden Proposes Homeownership Plan as Affordability Hits All-Time Low

Increased homeownership could be on the horizon with proposed plan from President Biden

President Biden has proposed a comprehensive homeownership plan in response to soaring housing costs, emphasizing measures such as tax credits for first-time homebuyers and incentivizing the sale of starter homes. With housing affordability at an all-time low and public concern mounting, Biden’s strategy aims to address the housing crisis and facilitate access to homeownership, though challenges persist in realizing widespread impact.


President Joe Biden called on Congress to pass legislation that lowers the cost of owning a home at a time when millions of Americans say homeownership seems out of reach.

The policies were included in the president’s State of the Union address on March 7. They were introduced at a time when public polling also shows that affordable housing is a top concern for Americans amid the 2024 election cycle.

recent survey from NeighborWorks America, a congressionally chartered nonprofit that provides community development services, found that 74% of Americans are concerned about the lack of affordable housing. A poll from Hart Research Associates found that 85% of Americans think “everyone deserves a safe and affordable place to call home.”

“I know the cost of housing is so important to you,” Biden said in his speech. “If inflation keeps coming down, mortgage rates will come down as well. But I’m not waiting.”

Biden was elected at a time when home prices and rents were soaring across the country. In turn, he instructed the U.S. Department of Housing and Urban Development to take a strategic approach to addressing housing affordability, housing discrimination, and increasing the supply of affordable housing. Biden has also created multi-billion-dollar incentive programs to encourage policy reforms like inclusionary zoning and ending unsheltered homelessness.

However, many Americans have not yet felt the impact of HUD’s strategy.

According to Zillow, Americans need to earn at least six figures to purchase a median-priced home, compared to just $59,000 in 2020Homeowners insurance, mortgage costs, and utility expenses are all up as well, making it much harder for low-income families to make the leap toward homeownership.

Housing affordability in the U.S. has also reached an all-time low, according to the National Association of Homebuilders’ Housing Opportunity Index. As of December 2023, just 37% of existing homes were affordable to families earning the U.S. median income of $93,000.

Biden said he plans to make homeownership more affordable by launching a $10,000 tax cut for first-time homebuyers. The tax credit would work out to roughly $400 per month and could help as many as 3.5 million middle-class families buy their first home over the next two years, according to a White House fact sheet.

“For many Americans, owning a home is the cornerstone of raising a family, building wealth, and joining the middle class,” The White House said in a statement. “Too many working families feel locked out of homeownership and are unable to compete with investors for a limited supply of affordable for-sale homes.”

To address the undersupply of affordable housing in America, Biden said he wants to give people who currently own “starter homes” a $10,000 tax credit if they sell their home. Starter homes are defined as homes that are below the U.S. median home value of $417,000.

The policy aims to inspire homeowners suffering from the “golden handcuffs effect” to put their homes on the market. The golden handcuff effect happens when a homeowner is reluctant to sell because their mortgage has a lower-than-average interest rate. The White House estimated that this policy could help three million families buy their first home.

The 30-year fixed mortgage averaged 6.74% in the week ending March 14, down from 6.88% the week before. However, the average mortgage rate is still well above the 3.94% recorded in 2019 before the pandemic began.

Biden also called on Congress to pass a tax credit package to build or renovate up to two million affordable homes. The package includes legislation to increase benefits for the Low Income Housing Tax Credit, which is the primary vehicle for building affordable homes, and tax-exempt private activity bonds.

Under the proposal, LIHTC allocations would be increased by 50% to about $5 million for small states, or $4.37 per capita, in 2025. That figure would increase in 2026 to $5.7 million for small states and $4.99 per capita.

The proposal also calls for creating a new Neighborhood Homes Tax Credit to cover the gap between construction costs and sales prices for rehabilitated or newly constructed affordable homes. The credit would provide $8 million to small states in 2025 and then adjust future disbursements based on inflation. The White House estimates the credit could build or preserve 400,000 starter homes.

“America needs to build more housing in order to lower rental costs and increase access to homeownership,” the White House said.

How You Can Help

The pandemic proved that we need to rethink housing in the U.S. It also showed that we need to increase the supply of affordable housing. Experts agree that building housing is the best way to end homelessness once and for all.

Demand your representatives support keeping many of the pandemic-related aid programs in place for future use. They have proven effective at keeping people housed, which is the first step to ending homelessness.


Robert Davis

Robert Davis

Robert is a freelance journalist based in Colorado who covers housing, police, and local government.

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