Trying to buy a house is 'playing a game you can't win'

Nathan Wilkins and many Americans are struggling with the harsh realities of the U.S. housing market, characterized by soaring rents, skyrocketing home prices, and doubled mortgage rates since 2019. Despite earning more, the cost of living and housing expenses leave little for savings, making homeownership seem increasingly unattainable. The situation is fueling widespread economic pessimism and dissatisfaction, impacting views on the upcoming election and raising concerns about affordability and the broader economy.

The Biden administration has proposed several measures to address housing affordability. These include:

1. Legislative and administrative actions: The administration has called on Congress to pass legislation to build and renovate more than 2 million homes, which would close the housing supply gap and lower housing costs for renters and homeowners5.

2. Expansion of the Low-Income Housing Tax Credit: This proposal aims to build or preserve 1.2 million more affordable rental units. Renters living in these properties save hundreds of dollars each month on their rent compared with renters with similar incomes who rent in the unsubsidized market.

3. Neighborhood Homes Tax Credit: This tax provision is aimed at building or renovating affordable homes for homeownership, which would lead to the construction or preservation of over 400,000 starter homes in communities throughout the country.

4. Innovation Fund for Housing Expansion: This is a $20 billion competitive grant fund that will support communities across the country to build more housing and lower rents and homebuying costs. This fund is expected to create hundreds of thousands of units which will help lower rents and housing costs.

5. Increasing banks’ contributions towards building affordable housing: The President is proposing that each Federal Home Loan Bank double its annual contribution to the Affordable Housing Program – from 10 percent of prior year net income to 20 percent – which will raise an additional $3.79 billion for affordable housing over the next decade and assist nearly 380,000 households.

6. Down Payment Assistance for First-Generation Homeowners: The President continues to call on Congress to provide up to $25,000 in down payment assistance to first-generation homebuyers.

These measures have been generally well-received by housing advocates and experts. However, they caution that these actions will not provide a quick fix to the housing affordability crisis. Some of the recommendations also require congressional approval, which may prove difficult. Furthermore, while some actions can be taken on their own, many of the proposals require partnerships with the private sector and state and local governments to be fully effective.