Biden’s affordable housing plan doesn’t address how supply will be brought to market: Real estate expert
Biden admin announces plan aimed at increasing affordable housing supply
The White House is opening up "Pandora’s box" with its new plan to address the housing crunch, according to one Real estate expert.
Romer Debbas LLP managing partner Pierre Debbas told "Mornings with Maria" the president’s plan doesn’t really address housing supply and its impact on the real estate market.
"A number of matters that they outlined this morning really doesn't address: how are you going to bring supply to the marketplace?" Debbas told FOX Business' Dagen McDowell.
The U.S. housing market is 3.8 million homes shy of meeting demand, researchers at Freddie Mac estimate.
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The Biden administration, on Wednesday, announced a number of steps aimed at easing the housing supply shortage, including working with local governments to create and sell 100,000 more affordable homes to homeowners and renters over the next three years. The effort focuses on lower and middle segments of the market.
The plan will also increase mortgage availability through Freddie Mac and Fannie Mae for manufactured houses and buildings with two to four units.
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Debbas stressed that when the government starts to get directly involved in development, "it can open up a huge Pandora's box."
Meanwhile, limited supply, along with record-low mortgage rates, contributed to higher median prices for homes. The median existing home price in July was $359,000, according to the National Association of Realtors (NAR), up nearly 18% percent from a year earlier.
Asking rent for houses also soared 13% year to date, the highest annual increase in the past five years, the Wall Street Journal reported, citing figures from real-estate data company Yardi Matrix.
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"It's really the perfect storm of having historic low-interest rates and the most robust housing market ignited by the pandemic," Debbas cautioned.
In addition, construction of new homes in the past 20 years fell 5.5 million units short of long-term historical levels, according to a June report by the NAR.
The Wall Street Journal and The Associated Press contributed to this report.