Otherwise, many millennials can’t afford to buy a new home or refinance their existing mortgages, this columnist says.
It’s not easy being a home buyer these days. U.S. home prices are high, housing inventory is low, and consumer sentiment is wobbling. A federal tax break for first-time home buyers will help.
As the purchase market remains soft, I’m concerned that this deceleration will continue, especially as the broader U.S. economy weakens. Having managed a large mortgage company during and after the financial crisis of 2008, I know that it’s vital for the U.S. housing market to remain robust and resilient.
Moreover, many more millennials are waiting to purchase a home because they are facing significant financial challenges such as high costs of student loans and credit card debt. In addition, wages have stagnated whereas living costs have increased, making it ever difficult to save for a down payment on a home. Even the many millennials who already have a mortgage are missing out on the opportunity to refinance at lower rates.
It’s time to re-adopt the tax break for first-time home buyers at the federal level. A similar measure was introduced in 2008 and provided a credit up to $7,500 for first-time home buyers. This initiative could be structured as a zero-interest loan that is paid back over several years or as a full credit.
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