National Republicans are highlighting the massive decline in housing affordability under a Democrat president.
Last week, the Republican National Committee (RNC) posted about housing prices on “X,” highlighting how the inflation under the Biden Administration has put these costs (and dreams of owning a home) out of reach for many Americans. The RNC wrote, “Housing affordability has fallen to the lowest level on record as interest rates rise in response to Bidenflation. ‘That’s Bidenomics!’”
Housing affordability has fallen to the lowest level on record as interest rates rise in response to Bidenflation. “That’s Bidenomics!” pic.twitter.com/HCJaft5eNu
The Housing Affordability Index, supplied by the National Association of Realtors (NAR), showed that mortgage affordability in the U.S. is below ‘100,’ which means that “a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home.”
In a press release issued in mid-September, NAR Deputy Chief Economist and Vice President of Research, Jessica Lautz, said, “Home buyers face the most difficult affordability conditions in nearly 40 years due to limited inventory and rising mortgage interest rates. The impact is exacerbated among first-time buyers who are more likely to be from underrepresented segments of the population.”
NAR lists three reasons affecting buyers’ reticence to purchase homes: “not enough homes available for purchase in buyers’ budgets (34%), buyers are waiting for mortgage rates to drop as higher prices affect affordability (18%) and buyers are waiting for prices to drop (9%).”
Another social media post, from the Chief Economist of Financial Products at Bloomberg LP, Michael McDonough, showed that the monthly mortgage payment for purchasers of existing homes went from $977 in March 2020 to $2,309 today.
The monthly mortgage payment for purchasers of existing homes, using the 30-year average mortgage rate, stands at $2,309. This is a substantial increase from $977 in March 2020. pic.twitter.com/JQHIJGQp9u
Addressing the increasing housing costs for Arizona was a priority for state lawmakers on both sides of the aisle during the recently completed legislative session, though those efforts produced few results in a very divided government. Republican lawmakers were able to strike a deal with Democrat Governor Katie Hobbs during the final stretch of the extended session to prohibit the rental tax for Arizona tenants. Arizona Senate Republicans claimed that “approximately 70 municipalities within our state charge this tax,” and that “this tax can cost as much as $200 per month.”
Senate Majority Whip Sine Kerr applauded the signing of this bill, explaining how important the removal of rental taxes across the state would be for countless Arizonans. She stated, “Rental prices aren’t going down anytime soon, and Arizona tenants are agonizing over just how much more expensive it is now to rent an apartment or house than ever before. For Metro Phoenix, June of this year saw the second-highest monthly total of evictions since the 2008 Great Recession. According to Maricopa County records, landlords filed to evict nearly 7000 times last month. We needed to act promptly. This bill will provide some help, and I’m proud the Majority Caucus spearheaded this change in tax policy.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
The decision by President Joe Biden to sharply increase the tariff on Canadian softwood lumber to 17.99 percent is threatening housing affordability and has prompted calls from The Wall Street Journal and homebuilders for the White House to take quick action to reverse course.
More than one-quarter of softwood lumber—such as pine, cedar, fir, and spruce—used in America comes from Canada. The new tariff is twice the 8.99 percent rate in effect when Biden took office in January. It comes on the heels of wholesale lumber prices which tripled from July 2020 to July 2021, adding nearly $30,000 to the average cost of a new home, according to the National Association of Home Builders (NAHB).
The NAHB says the increased tariff is adding on average another $9,000 to the price of a new home compared to July. It is also pushing up prices of renovation and remodeling projects that are critical for ensuring affordable housing options in many communities.
“The doubling of duties on Canadian softwood lumber is ill-timed and ill-advised,” NAHB Chairman John C. Fowke wrote to Biden on Dec. 3. “As has been the case for decades, the domestic lumber industry cannot, nor will not, produce enough lumber to meet U.S. consumer demand. We rely on lumber from Canada to fill the production gap, so punitive tariffs on our closest and best trading partner on a product that American consumers desperately need defies logic.”
Top NAHB officials met at the Canadian Embassy in Washington DC last week to discuss the tariffs. After the meeting, Fowke send his letter to Biden, calling on U.S. trade officials to negotiate with the Canadian government for a lumber trade agreement that eliminates tariffs and ensures a fairly priced supply of lumber.
“The tariffs harm housing affordability by acting as a tax on American home builders and home buyers, and contribute to huge price volatility in the lumber market by putting upward pressure on lumber prices,” Fowke wrote.
The association, which has 140,000 members across the country, also called on Biden to support efforts to increase domestic lumber production. “Improving the health of our nation’s forests and increasing the supply of domestic timber are not mutually exclusive goals,” Fowke wrote.
Last month the Wall Street Journal’s editorial board noted that prices for U.S.-produced lumber is at more than 75 percent above pre-pandemic levels.
“For decades U.S. sawmills haven’t been able to meet domestic demand, but they’ve leaned on government to protect their market share,” the WSJ’s opinion stated. “The shortage would be much worse if not for Canadian lumber, which backs up U.S. output.”
The tariffs, the WSJ wrote, “will raise building costs in an already strained housing market.”
Then last week, The Washington Post’s editorial board published an opinion succinctly titled “Biden is hiking lumber tariffs at the wrong time.”
And the editorial board for the Las Vegas Review-Journal wrote that driving up the cost of lumber via tariffs will discourage construction and worsen inventory shortages for southern Nevada. “Much like the weather, politicians love to talk about affordable housing but none of them want to do anything about it. Put the Biden administration firmly in that camp,” the Review-Journal noted.
