Biden announces plan to boost affordable housing with new federal funds and new smaller homes with prices rising by more than 19% during sky-high inflation
- Biden’s plan will expand federally backed financing for affordable housing and focus on building and preserving rental housing
- Also will start a test program to fund construction of tiny homes to increase the housing supply and increase money for manufactured homes
- Biden trying to counter inflation as midterm election approaches
- U.S. housing prices have risen 19.8% in February
President Joe Biden announced a plan on Monday to make housing more affordable, particularly for first-time homeowners and for renters being gouged by high inflation.
The proposal will expand federally backed financing for affordable housing, focus on building and preserving rental housing for low- and moderate-income families, and start a test program to fund construction of tiny homes to increase the housing supply.
The administration is also examining increasing funding for manufactured homes, which are constructed in factories and then shipped to destinations. And officials will work with the private sector to address supply chain challenges and improve building techniques to finish construction in 2022 on the most new homes in any year since 2006, the White House said.
President Joe Biden’s plan will expand federally backed financing for affordable housing and focus on building and preserving rental housing
U.S. housing prices have risen 19.8% in February
The move is part of Biden’s efforts to counter inflation and the record-high prices for housing, food and gas that have resulted from it. Voters, ahead of November’s midterm election that will determine which party controls Congress, have given Biden low marks for his handling of the economy.
U.S. home prices surged in February, according to the S&P CoreLogic Case-Shiller US National Home Price Index. Prices rose 19.8% year-over-year in February, an even higher rate than the 19.2% growth seen in January.
Moody’s estimates the shortfall in the housing supply is more than 1.5 million homes nationwide.
The shortage came because of home buying spree, when buyers took advantage of record-low mortgage rates to purchase, and because of the covid pandemic, which saw people flee cities for more spacious suburb spaces.
Biden said last week that tackling inflation is his highest domestic priority.
The actions will ‘help close the housing supply shortage in five years,’ a senior administration official said.
The median existing-home price rose 15% in March from a year earlier to $375,300, according to the National Association of Realtors. The national median rent in April rose more than 16% from a year earlier, according to rental website Apartment List.
‘The Plan’s policies to boost supply are an important element of bringing homeownership within reach for Americans who, today, cannot find an affordable home because there are too few homes for sale in their communities. And it will help reduce price pressures in the economy, as housing costs make up about one-third of the market basket for inflation, as measured by the Consumer Price Index,’ the White House said in a fact sheet.