Aside from assisting consumers with their real estate needs, REALTORS® are engaged in the local, state, and national conversations related to property rights and affordable housing, and some much-needed help could be on the way for first-time homebuyers. As a candidate, President Joe Biden proposed the First Down Payment Homebuyer Tax Credit, which could be significant in aiding potential first-time homebuyers. For starters, the credit could be used to cover all or a considerable share of a buyer’s down payment. With home prices rising ever higher, any down payment assistance is welcomed when a family is looking to buy.
For years, aspiring minority and millennial homebuyers have struggled unsuccessfully to save enough for a down payment. Sky-high student loan payments, along with ever-increasing childcare costs and other urgent needs, have made the goal of buying that first home elusive for too many Americans. Add to that the financial hardships brought upon us by the COVID-19 pandemic, which has hit minorities and lower-wage workers particularly hard. These demographics especially would immediately benefit from the Biden proposal.
Down payment assistance – in this case, up to $15,000 – could make all the difference in helping hopeful buyers get a foot in the door. And making the credit advanceable would mean buyers could access the funds upon closing rather than having to wait until next year when their tax return is filed and the refund arrives.
That said, policies to increase the supply of homes are equally important. As we take a look at the current housing market and mortgage data, we see an upward trend. For instance, existing-homes sales totaled 5.64 million in 2020 – their highest level since 2006, before the Great Recession – with mortgage rates at all-time lows. But while demand is high, supply is registering at a 50-year low. This means home prices will continue to soar unless more residential units can be created. So, tax and other incentives that increase supply are equally important in order to keep home prices affordable. Realtors, on a local and national level, will continue to advocate for the building of more affordable housing because, in addition to increasing the housing supply, it will provide a boom for our struggling economy.
As 2021 President, I am proud to help lead efforts that encourage policies and ideas, whether they be local, state, or national, that level the playing field and help all our neighbors achieve the American dream of homeownership. That’s Who We R®.