‘Bidenomics’ Raises Mortgage Rates to Highest in Over 20 Years for Homebuyers.
The Impact of “Bidenomics” on the U.S. Housing Market
Hold on tight, because “Bidenomics” is wreaking havoc on the U.S. housing market. Mortgage rates have skyrocketed to their highest level in over two decades.
Just recently, the average rate for a 30-year fixed mortgage hit a staggering 8 percent, a record high since 2000. Brace yourself for the consequences: according to the Committee to Unleash Prosperity, this means Americans will be burdened with an additional $1,500 per month in Biden mortgage tax for the next 30 years on a $500,000 home purchase. To put things into perspective, when former President Donald Trump left office in January 2021, the average rate on a 30-year mortgage was a mere 2.65 percent.
Unsurprisingly, potential homebuyers are growing increasingly hesitant about entering the current market due to these exorbitant mortgage rates. A recent survey conducted by Fannie Mae revealed that a whopping 83 percent of consumers believe mortgage rates will either remain high or continue to rise in the next year. In addition, a staggering 84 percent agreed that now is not the right time to buy a home. This latter percentage is the highest ever recorded, according to Yahoo Finance.
Consequently, the surge in rates has resulted in a scarcity of available homes for sale. Sellers are reluctant to make a move in fear of having to purchase a new home at these unfavorable rates.
“Mortgage rates are expected to remain elevated for the time being,” warns Hannah Jones, an economic research analyst. “It seems that the mortgage lock effect will persist until there is a significant shift, such as substantial improvements in inflation.”
Despite President Joe Biden’s insistence that the U.S. economy is thriving, everyday Americans are grappling with the harsh reality of soaring inflation rates. In September alone, the Consumer Price Index rose by 3.7 percent compared to the previous year, with a monthly increase of 0.4 percent following a 0.6 percent rise in August, according to the Bureau of Labor Statistics.
As highlighted in a thought-provoking op-ed by the Las Vegas Review-Journal, this 3.7 percent year-over-year increase is far from the Federal Reserve’s target of 2 percent. It also builds upon the already alarming 7 percent annual inflation in 2021 and 6.5 percent in 2022.
Shawn Fleetwood is a staff writer for The Federalist and a graduate of the University of Mary Washington. He previously served as a state content writer for Convention of States Action and his work has been featured in numerous outlets, including RealClearPolitics, RealClearHealth, and Conservative Review. Follow him on Twitter @ShawnFleetwood
How has the housing market been affected by “Bidenomics” and the government’s push for affordable housing
Est it has been since the survey began in 1979.
So, why are mortgage rates soaring under the Biden administration? One key factor is the government’s expansive fiscal policy, which includes significant investments in infrastructure and social programs. While these initiatives may have positive effects in other areas of the economy, they have inadvertently led to inflation and rising interest rates.
Another factor contributing to the spike in mortgage rates is the Federal Reserve’s monetary policy. In response to the economic downturn caused by the COVID-19 pandemic, the Fed implemented measures to stimulate the economy, including keeping interest rates near zero. However, as the economy has shown signs of recovery, the Fed has begun tapering these policies, which has resulted in an increase in rates.
The impact of “Bidenomics” on the housing market extends beyond mortgage rates. The administration’s push for affordable housing and expansion of government support programs has led to a shortage of homes for sale. This imbalance between supply and demand has driven up housing prices, making it even more challenging for potential homebuyers to enter the market.
Furthermore, the proposed changes to the tax code, such as the elimination of the state and local tax deduction, could have adverse effects on homeownership. With higher taxes, individuals may find it more difficult to afford homeownership, which could further dampen the housing market.
While these challenges exist, it is important to note that the Biden administration recognizes the importance of a strong housing market. Efforts are being made to address the housing shortage and make homeownership more accessible, including the allocation of funds for affordable housing initiatives and grants for first-time homebuyers.
In conclusion, “Bidenomics” has had a significant impact on the U.S. housing market, with mortgage rates reaching the highest levels in over two decades. This, coupled with a shortage of homes for sale and potential changes to the tax code, has created a challenging environment for potential homebuyers. However, the administration is taking steps to mitigate these issues and promote a stronger and more inclusive housing market.
It remains to be seen how effective these measures will be in stabilizing the housing market and making homeownership more accessible. Time will tell if “Bidenomics” will ultimately have a positive or negative long-term impact on the U.S. housing market.
