President Joe Biden announced new housing during his State of the Union address. (iStock)
President Joe Biden addressed rising housing costs in his State of the Union address Thursday night, saying he wants to create a tax credit that would give homebuyers $400 a month.
Biden’s plan would create a $10,000 tax credit over two years in the form of monthly payments of $400 to first-time homebuyers and those selling their starter home.
“For many Americans, homeownership is the foundation for raising a family, building wealth, and joining the middle class,” the White House said. stated in a statement. “Too many working families feel excluded from homeownership and are unable to compete with investors for the limited supply of affordable homes for sale.”
Mr. Biden called on Congress to enact legislation to give this tax credit to the middle class, saying it would be the equivalent of cutting interest rates by 1.5 percentage points. The government said making housing available to people buying second homes would improve the supply of housing for people in the entry-level housing market.
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Biden calls for changes to reduce closing costs
In his State of the Union address, the president called for an end to title insurance and also called for changes to closing costs.
Earlier, the Biden administration approved a pilot program that would waive lender title insurance requirements for certain refinances. This can save homeowners up to $1,500, with an average of $750, according to the magazine. announcement.
“Independent analysis shows that market-wide title insurance typically pays consumers only 3% to 5% of their claims, compared to more than 70% for other types of insurance,” the announcement said. It is being “Homeowners can purchase their own title insurance policy if they wish.”
The Consumer Financial Protection Bureau (CFPB) will also examine closing costs and pursue rulemaking regarding “anticompetitive closing costs imposed by lenders on homebuyers and homeowners.”
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Title industry claims savings promises are false
Despite the announced potential savings, some industry observers say this is a “false promise of savings” that exposes homebuyers, lenders and taxpayers to further risks. It is claimed that it will be.
“The Biden administration’s announcement today that it has approved a pilot program that will waive lender title insurance requirements on certain refinances, with the goal of reducing closing costs for homeowners, promises savings for homeowners. It is a purely political gesture that offers a false promise of… American Land Title Association (ALTA), the trade association for the title industry.
“Closing costs are a significant barrier to affordability for purchasing or refinancing a home,” said Federal Housing Finance Agency (FHFA) Administrator Sandra Thompson. However, she went on to say that the title insurance waiver would only apply to certain safer refinances and would be subject to significant oversight. According to the title report.
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