Millions of Americans are facing a housing crisis, with many unable to afford homes or suitable rental accommodations, elevating housing as a pivotal issue for voters ahead of the upcoming presidential election.
The primary factor behind the housing affordability crisis is a significant shortage of available homes, with some economists estimating a shortfall of between 1 million and 4 million units. This deficit has led to fierce bidding wars, driving the median sales price of existing homes in the U.S. to a record high of $426,900 in June, despite home sales being in a prolonged slump for over two years.
Additionally, soaring mortgage rates have kept potential homebuyers at bay. The average rate for a 30-year mortgage recently reached a 23-year high of nearly 8% late last year, currently settling around 6.44%.
Renters are also struggling, with median asking rents approximately 20% higher now compared to pre-pandemic levels, despite a slight easing in rent increases over the past year due to a surge in apartment construction.
In this context, candidates in the race, including Vice President Kamala Harris and former President Donald Trump, are proposing initiatives aimed at making the American Dream of homeownership more accessible.
Harris has introduced a comprehensive plan designed to enhance affordable housing availability for both buyers and renters. This includes offering first-time homebuyers up to $25,000 in down payment assistance, tax incentives for builders, and federal funding to expedite construction in cities. She claims these measures could result in the addition of 3 million new housing units within four years.
In contrast, Trump is proposing tax incentives for homebuyers, reducing “unnecessary” regulations on home construction, and making federal land available for housing development. He argues that his approach will lower housing costs by addressing inflation and illegal immigration.
Experts indicate that while both candidates’ proposals contain valuable concepts, they may fall short of resolving the underlying issues affecting the housing market.
Key points from their platforms include Trump’s assertion that the nation’s housing challenges are tied to immigration, advocating for mass deportations to ease housing demand. However, experts counter this by stating that rising housing costs stem more from increased interest rates and heightened demand rather than immigration trends.
Economists are warning that aggressive immigration policies could hinder the construction workforce, which relies heavily on foreign-born labor. In fact, over one-third of homebuilders fall into this category, making potential labor shortages a concerning prospect.
On the other hand, Harris is focused on direct assistance for homebuyers, emphasizing down payment assistance for first-time buyers who have maintained timely rental payments for two years. This would reportedly benefit over 4 million individuals, at an estimated cost of $100 billion.
However, both candidates acknowledge the necessity of minimizing zoning restrictions and utilizing federal land for housing development.
Harris has proposed a $40 billion fund to incentivize local governments to streamline their zoning regulations, provided they commit to affordable housing initiatives. Concurrently, Trump highlights the importance of addressing zoning laws to accelerate housing production.
Despite their differences, both candidates recognize the critical need for more affordable housing solutions to address the pressing shortages faced by communities across the nation.
