The two things Biden proposed to shake up the housing market

FILE-Images of homes on the market in a neighborhood. (Jeff Greenberg/Education Images/Universal Images Group via Getty Images)

With housing costs at record highs, President Joe Biden is trying to make buying a home more affordable for people nationwide. 

The president is attempting to make this possible through two tax credits as part of his plan to lower housing costs. 

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Biden is proposing a $5,000 tax credit for first-time home buyers to put toward their mortgage, which is an estimated $400 monthly.

He’s also introduced a $10,000 tax credit for families who sell their starter homes, described as houses below the area median home price in the county, to another owner-occupant. According to a White House fact sheet, this will help 3 million families. 

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Other parts of Biden’s plan to make housing more affordable include the expansion of the Low-Income Housing Tax credit to build or save over a million more affordable rental homes.

The president is also unveiling a new $20 billion fund as part of his budget proposal to help communities to build more housing and lower rents and home buying costs.

These funds will also contribute to building more affordable family housing units and new starter homes for middle-class families. 

A recent report from Freddie Mac reveals that the average interest rate for a 30-year fixed mortgage has spiked to 6.88%, showing a slight recovery compared to 2023. 

Freddie Mac noted in the report that "mortgage rates continue to be one of the biggest hurdles for potential homebuyers looking to enter the market. It’s important to remember that rates can vary widely between mortgage lenders so shopping around is essential."

This story was reported from Washington, D.C.