The scope of the plan is modest compared to industry estimates of how many new homes will be needed to meet demand. The White House is aiming to provide 100,000 new homes, while a study recently published by the National Association of Realtors found that housing supply is lagging between 5.5 million and 6.8 million units.
Treasury and HUD would revitalize a joint risk-sharing program that expired in 2019 to allow government housing finance agencies to allocate more low-cost capital to affordable housing developments. Fannie Mae and Freddie Mac, who are behind roughly half of the residential mortgage market, could expand their investments in multi-family homes funded by the Low Income Housing Tax Credit. Community development financial institutions and nonprofit housing associations could draw on more funding from the Capital Magnet Fund to create more affordable housing.
Policy makers have been concerned for years about a housing shortage that is making home ownership inaccessible for millions of Americans. The US housing stock has grown an average of 1 percent per year for the past two decades, from 1.7 percent from 1968 to 2000, according to this a June report commissioned and published by the National Association of Realtors.
House prices continued to skyrocket during the pandemic, although much of the rest of the economy was stuttering. And they’re showing no signs of slowing: Home prices rose 18.6 percent year-over-year in June, according to the S&P CoreLogic National Case-Shiller House Price Index – the highest annual rate since the index began in 1987.