In this article, we are going to see the good, the bad sides of Biden's home insurance policies. And whether or not they will cause the next housing market crash or if we're going to see home prices absolutely skyrocket like they have been doing for the last six months.
First Time Home Buyers
Let's start off with the $15,000 tax credit for first-time homebuyers. Out of all of his policies, this one has specifically gotten most of the attention from the media.
On his website it says, he wants to help the families buy their first homes and build wealth by creating a new refundable advanceable tax credit up to $15,000. This tax credit will be permanent and advanced. It means that home buyers will see the tax credit when they make their purchase instead of waiting to receive the assistance when they file taxes.
So personally, I think this is a great idea especially for those who are relying on these government-backed loans like the FHA loan. And with the home prices skyrocketing for the last 12 months, it's becoming harder and harder for first-time homebuyers to come up with that initial down payment.
Home prices have risen over 15% over the last 12 months according to the National Association of Realtors. This means a house that costs $400,000 will now worth $460,000. Hence, the first-time buyer has to pay an additional $60,000 for that same house which they could have got 12 months ago for $60,000 less.
As a result, this $15,000 tax credit will be incredibly helpful in getting those homebuyers into those properties. The best part about this is it's an advanced tax credit of up to $15,000.
So, if you are a first-time buyer then take advantage of this policy as soon as possible because that increase in buyers in the market is going to cause home prices to go up. And that $15,000 then is going to become less and less effective as there will be more buyers in the market so prices will be skyrocketing. So if you're still not a home buyer then try to buy yourself your first home to make this policy effective!!!
Housing Should Be A Right, Not A Privilege
On president Biden's website he says, '' Far too many Americans lack access to affordable and quality housing. Nationwide, we have a shortage of available, affordable housing units for low-income individuals. Tens of millions of Americans spend 30% of their income on housing..."
So, for this situation as a president, he plans to invest $640 billion over ten years to help Americans to get affordable housing.
This is pretty interesting to me, as he's pointing to the fact that many Americans spend more than 30% of their income on housing. This increase in home value is not going to be a good thing for the economy of the Americans.
Here, Joe Biden states that he doesn't want Americans to spend more than 30% of their income on housing.
I think it's an excellent concept because by doing that he is reducing the housing cost and that means people now will have more money in which they can pump the economy in other ways.
As a result, these families will now have more money to spend on clothes, food and other necessities. And that can surely have a positive impact on the economy.
President Biden designed this program, "To help strengthen communities that have experienced significant underinvestment and high rates of poverty while also providing opportunities for the first responders, educators and those engaged in national services to purchase homes in those same communities..."
He's going to do this with down payment assistance programs, significant discounts on the price of a home and providing access to low-interest loans.
Essentially, for critical workers like teachers, firefighters, police officers & emergency medical technician. He's going to help them buy homes but only in underdeveloped neighborhoods in which they work. In my opinion, Joe Biden's proposal is kind of stepping in the right direction.
Hope this article enlightened you with a few of the impacts of Joe Biden on home insurance policies.
Have decided to buy your first home yet????