The Plan:

1. Build and Preserve Homes:

• Build and preserve over 2 million homes.
• Launch a $20 billion competitive grant fund to support housing expansion.
• Raise an additional $3.79 billion over the next decade for affordable housing projects.

2. Financial Assistance for Homebuyers:

• Provide a $10,000 tax credit for first-time homebuyers and sellers of starter homes.
• Pass a mortgage relief credit for middle-class first-time homebuyers ($5,000 annually for two years).
• Offer a $25,000 down payment assistance for first-generation homebuyers.

3. Renter Protections and Assistance:

• Combat rent gouging and unfair practices by corporate landlords with DOJ and FTC investigations.
• Crack down on rental junk fees with a new rule to ban misleading and hidden fees across all industries.
• Expand Housing Choice Vouchers to assist over 500,000 households.

What it means:

Build and preserve homes:

When there are more homes available, sellers have less bargaining power and are forced to lower their prices if they want to make a sale in timely fashion. The U.S. is short about 4 million homes, per Freddie Mac, and Biden plans to build 2 million homes. This could slow price and rent increases, but it’s unlikely to cause a reversal.

Financial Assistance for Homebuyers:

A $10,000 tax credit, $25,000 down payment assistance, and $5,000 mortgage relief credit for first-time homebuyers is designed to make homeownership more attainable. These can help cover down payments and closing costs, which are often substantial barriers for first-time buyers. There may be unintended consequences though. In areas with limited supply, the increased competition among buyers might actually drive prices up further.

Renter Protections and Assistance:

The Department of Justice (DOJ) and the Federal Trade Commission (FTC) are tasked with investigating and taking action against corporate landlords and private equity firms involved in illegal practices such as price fixing and information sharing that inflate rents. By addressing these anticompetitive behaviors, the administration aims to protect renters from excessive rent increases and ensure a more equitable housing market. These efforts, though helpful and important, are unlikely to affect the macro trends of the housing market.