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Published Date 5/6/2024

Shaking loose a stagnant real estate market might take drastic measures What goes up must come down? High in the sky home prices now seem like a hot air balloon with no release valve. Up nearly 5% year-over-year in every major U.S. city according to a Redfin report released Thursday, Treasury Secretary Janet Yellen admits that combined with high interest rates it’s a deadly combination, making it “almost impossible” for first-time homebuyers to break into the U.S. housing market. “With house prices having gone up, along with mortgage rates it’s almost impossible for first-time buyers,” Yellen said in a Yahoo!Finance article borrowed from Fortune Magazine. Current homeowners are reluctant to sell their homes out of fear of losing their low mortgage rates (called the “lock-in” effect). Why sell only to trade them for high rates and higher home prices? So all eyes are turning to a pair of housing tax credits proposed by President Joe Biden to ease the pain. “One tax credit would provide $10,000 for first-time homebuyers, while a separate $10,000 tax credit would benefit homeowners in selling their “starter home” to move into a larger house,” says Lake. “The hope would be to increase starter home supply, which is extremely low as more current homeowners hold on to their current properties. However, with home prices reaching a near-record $383,188 at median, according to Redfin, many buyers are still excluded.” “We know that affordable housing and starter homes are an area where we really need to do a lot to increase availability,” Yellen said during her testimony in front of the House Ways and Means Committee last week. Reach out for more! Yahoo!Finance, Fortune, TBWS

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