As a new administration enters the office and will be significant policy changes in a number of areas, especially for homeowners. Current mortgage holders to prospective homebuyers and renters are likely to see some benefit from President Joe Biden's proposals if enacted. Here's a preview of what to expect.
Forbearance Protections Extended
Many workers are facing precarious employment situations as a result of the coronavirus pandemic, the government in March passed a forbearance policy that allowed homeowners with mortgages held by Fannie Mae and Freddie Mac to pause their payments for up to 360 days. Many private lenders voluntarily adopted similar policies, all aimed at helping homeowners avoid foreclosure even if they were struggling to meet their mortgage payments. Lawrence Yun, Cheif Economist at the National Association of Realtors, said Biden's administration is likely to extend those protections. If you're struggling to meet your mortgage payment, you should get in touch with your lender. Forbearance does not cancel any portion of your debt.
First-Time Buyer Credit, Student Loan Relief
Biden has proposed two policies that Yun said will be especially helpful to new homebuyers. The first is a $15,000 tax credit for first-time homebuyers that can be applied to your down payment or closing costs. The second is student loan forgiveness, though the amounts have not yet been set and congressional action may be needed. Student debt is a major barrier for many first-time buyers, so reducing that burden will help people get into their own homes faster. The coronavirus-fueled trend of more people working from home means the tax credit is especially well-positioned to pack an extra punch.
Rising Property Values
This is great for current homeowners but not so much for prospective buyers. Yun explained that the policies meant to help homebuyers are sure to stimulate demand, which means real estate prices are likely to go up even more than the 12% they did nationally in the third quarter of 2020 compared with the third quarter of 2019, according to NAR. Rising prices will be further fueled by a low housing supply and an already-competitive market. "Any time demand is stimulated, it's going to push up prices," he said. "For homeowners, it is good news. Whether they realize it or not, it means even faster strengthening in home prices, and most homeowners have their wealth tied to their housing," according to Yun.
Boosting Affordable Housing
Biden's commitment to the construction of more affording housing. A major factor driving up real estate prices, Yun said, is the limited availability of homes on the market. The new development will ease some of that pressure by making more affordable housing available across the price spectrum. President Biden has pledged $100 billion in funding for affordable housing.
Bottom Line
President Biden has made big promises around housing policy, and if his agenda is enacted, homeowners and prospective homebuyers should all see some benefits. In the near term, the focus is likely to be on keeping the housing market stable through the coronavirus pandemic and avoiding foreclosures. Further down the road, a number of financial policies are on offer that should promote higher homeownership rates.
As always, if you or if you know anyone looking to sell, buy, or invest in real estate. I would be honored if you would refer me.
Thank You,
Qierre McGlory
Keller Williams Realty
#01938370
(714) 577-2787
qierre.mcglory84@gmail.com
#realestate #homebuyers #homeowners #oc #fullerton #fullertonhousefinder #qierrerealestate #youragentq #homeagentq