During her testimony before the House Ways and Means Committee, U.S. Treasury Secretary Janet Yellen expressed concerns about the challenges facing first-time homebuyers in the current housing market. Yellen noted that with rising house prices and higher interest rates, it has become “almost impossible” for first-time buyers to enter the market.
To address this issue, President Joe Biden has proposed two tax credits aimed at alleviating the housing crisis. The first tax credit would offer $10,000 to first-time homebuyers, while the second would provide a $10,000 credit for homeowners selling their starter homes to upgrade to larger properties.
Yellen emphasized the urgent need to increase the availability of affordable housing and starter homes, especially as median home prices have soared to $1 million in 550 American cities, with California being particularly affected.
Part of the problem lies in investors dominating the affordable housing market, with a significant portion of properties being purchased by investors, according to a report from Redfin. Lawmakers are exploring measures to address this issue, including legislation proposed by Senators Sherrod Brown and Ron Wyden to curb tax benefits for corporate investors acquiring residential properties.
Additionally, the Stop Predatory Investing Act aims to prevent large investors from claiming deductions on interest or depreciation related to residential properties. Another proposed bill, the End Hedge Fund Control of American Homes Act, seeks to restrict hedge funds from owning residential properties and mandate the sale of a portion of their single-family home inventory to families annually.
Senator Jeff Merkley emphasized the importance of ensuring that housing serves as homes for people rather than profit centers for Wall Street, calling for the implementation of measures to ensure fair access to affordable housing for all families.
