The Biden administration has introduced new measures to reduce the soaring median home prices, which have increased by 38 percent since January 2021. Treasury Secretary Janet Yellen announced these housing policy initiatives as part of a broader affordability agenda to address the ongoing supply shortage and high prices. The administration is taking steps to boost supply and lower costs, including a $100 million fund over three years to finance affordable housing projects.
Yellen emphasized the significant housing supply shortfall that has led to an affordability crunch, prompting the White House to urge federal, state, and local agencies to finance new housing development. Additionally, the administration is encouraging the Federal Home Loan Banks to allocate 20 percent of their net income to housing programs, with a focus on new construction.
In efforts to educate state and local governments on utilizing recovery funds for housing, an “Affordable Housing How-To Guide” was announced. The administration believes that shelter inflation will eventually moderate, despite the recent increases in rents and median home prices.
Various White House officials, including Lael Brainard and Acting HUD Secretary Adrianne Todman, have also highlighted the administration’s efforts to address housing affordability challenges. A recent study by the Treasury Department revealed that home and rent prices have outpaced income growth for the past two decades, particularly affecting households of color and low-income communities.
In light of these challenges, the administration is implementing a comprehensive plan to lower housing costs and increase access to affordable housing options for all Americans. “In a market with so few available homes, buyers may have to wait even longer for the right home to become available, especially now that buyers can afford less,” stated Skylar Olsen, chief economist at Zillow in the report. “Changes in mortgage rates during this time could be the deciding factor in whether a buyer can afford a home or not.”
According to Redfin data, the median monthly mortgage payment is currently $2,829 at a 6.99 percent mortgage rate, which is an increase of 8.6 percent from a year ago. This is just $30 below the record high set in the four weeks ending April 28.
Source link
