Why home buying could go up when Biden is president
While this does not influence our opinions on the products, we do receive compensation from partners whose offers appear here. We are always on your side. See our full advertiser disclosure here.
Home sales were down this year, but this is not due to a lack of demand from buyers. Rather, it is because the housing inventory has been extremely limited. If anything, buyers are clamoring for homes, especially since they want to capitalize on record highs mortgage rates. But in the absence of an adequate inventory, many potential buyers are excluded.
That could change, however, once President-elect Joe Biden takes office. Here’s why.
Less uncertainty could increase inventory
The coronavirus pandemic and recession this has made many owners hesitate to list their properties. Given the state of the economy and the uncertainty of the election, the reluctance of potential sellers to shake things up is understandable.
But now the election is decided. And there is potentially light at the end of the dark coronavirus tunnel. The positive news on the vaccine front could cause a large number of sellers to change their minds and put their homes on the market. And the more inventory available, the more likely we are to see home purchases.
That’s not all. Biden has a specific plan to make more accessible home ownership to the masses. First, it offers a tax incentive called the first down payment tax credit of up to $ 15,000 for qualifying first time buyers. Unlike other tax credits, eligible buyers would have access to this money when purchasing their home. They would not need to pay the money and wait to be reimbursed when filing their tax return.
Biden also has a plan to end discriminatory practices that have historically prevented people of color from owning property. He made it clear that he intended to continue mortgage lenders that discriminate on the basis of race. Some lenders charge higher interest rates or impose additional loan terms that do not apply to white applicants.
Should you consider buying a home once Biden takes office?
By itself, a Joe Biden presidency may not make you go out and apply for a mortgage. But if buying a home is already on your radar, it might now be a realistic goal. You may have hesitated due to the unfavorable economic climate or the rise in house prices that we have seen in recent months. If so, it might pay off to prepare to buy in a year or two.
Of course, this time frame gives you the opportunity to make yourself an exceptional consolidation loans candidate. You can work to improve your credit score, get rid of some unhealthy debt and save extra funds for down payment. Keep in mind that there is no guarantee that the aforementioned tax credit will pass, so you cannot necessarily count on it to finance the purchase of your home.
It is too early to say how well President-elect Biden will do a good job pulling the country out of the pandemic and out of our current recession. But if he is successful in helping the United States regain its health and finances, that alone could drive up home purchases – with or without buyer credit.