The Biden administration has vowed to tackle the US crisis of overpriced and undersupplied homes, announcing several regulatory changes on Wednesday and plans to add 100,000 new and affordable homes over the next three years.
The White House said it was relaunching a partnership between the Treasury’s Federal Financing Bank and the Housing and Urban Development agency to provide affordable financing for buyers, while boosting the supply of manufactured homes through the Federal Home Loan Mortgage Corporation.
“The agencies will work with state and local governments to boost housing supply by reducing exclusionary zoning and leveraging existing federal resources,” the White House said in a statement. Ultimately, the plan was to alleviate the national housing crisis in the short term “by creating nearly 100,000 additional affordable homes over the next three years.”
Decades of underbuilding have left the United States with a 6.8-million-home deficit, the National Association of Realtors said. While construction has steadily increased, it still remains well below the levels needed to match supply with demand.
The median selling price for existing homes in the United States rose 17.8 percent in July from a year earlier to hit a record high of $359,900, according to the realtors’ association.
Housing shortages have become dire since the financial crisis of 2007/2008 and last year’s coronavirus outbreak.
Investment firms rushed to the realty market to buy after the economic crunch left by both crises, snapping up properties at low prices and earning steady income by renting them out. The trend accelerated as more institutional investors started buying rapidly appreciating homes, further eroding affordability.
Under the plan announced by the administration on Wednesday, first-time buyers and philanthropies will have a chance to buy distressed properties insured by the Federal Housing Administration, giving them a critical head start over large, well-organized buyers.