V
ice President Kamala Harris has proposed a new economic plan to tackle the housing affordability crisis in the United States. The plan includes a provision for down payment assistance of up to $25,000 for first-time homebuyers, which is expected to help over a million such buyers each year. Additionally, Harris is pushing for the construction of three million new housing units over the next four and a half years to address the housing shortage issue.

    The plan also includes a $40 billion "innovation" fund to support local solutions for increasing housing supply. This fund is aimed at taming housing costs and expanding homeownership opportunities across the country.

    Harris's plan has received support from various media sources such as Wall Street Journal, New York Times, and Washington Post. The plan is expected to simplify down-payment assistance processes and expand their reach to help more first-time homebuyers purchase homes.

    Harris has also addressed the issue of corporate ownership of rental properties, vowing to curb collusion among corporate landlords who artificially inflate rental prices using price-fixing software.

    While high borrowing rates and inventory shortages have pushed many prospective homebuyers to the sidelines, delivering new housing could help alleviate these challenges. Economists have recognized housing shortages as a major driver of inflation over the past few years, making Harris's plan to add three million new homes to the market a welcome move.

    The Federal Reserve and monetary policy continue to play a crucial role in overall consumer and builder sentiment. Recent hints of potential interest rate cuts in September could boost builder confidence, as housing starts and building permits are expected to increase in anticipation of these cuts.

    CoreLogic Chief Economist Dr. Selma Hepp believes that this prolonged high-interest-rate period has negatively impacted recent homebuilder confidence. However, early indicators for August suggest a slight improvement in these sentiments, which could continue into 2024.