Davidson Delivers Remarks at Hearing to Examine the Characteristics and Challenges of Today’s Homebuyers
Washington,
March 20, 2024 -
Today, the House Financial Services Subcommittee on Housing and Insurance, led by Chairman Warren Davidson (OH-08), is holding a hearing entitled “The Characteristics and Challenges of Today’s Homebuyers.”
Watch Chairman Davidson’s opening remarks here.
Read Chairman Davidson’s opening remarks as prepared for delivery:
“Today, we bring together a panel of our nation’s housing experts to delve into housing challenges in purchase markets across the country.
“Namely, we have asked our witnesses the questions, ‘Who is buying housing today and how are they financing it?’
“These may seem like simple questions. But underlying them are more complicated factors that have been driving unaffordability for millions of American families.
“Let’s break this down. The 30-year fixed rate mortgage has increased over 100 percent since 2020, doubling the average monthly mortgage payment. That alone is twice the amount of pain for anyone wanting to buy a home.
“But wait, there’s more. Because of the lack of housing inventory, the median home price has gone up, too–by 27 percent since 2020.
“How many of us have engaged in America’s favorite pastime, looking up homes for sale on Zillow or a similar website? You won’t find nearly as many as you did just a couple of years ago, and some have shockingly high price tags.
“These high prices are great for current homeowners who are not looking to move any time in the near future, as their equity is now worth more.
“But they are extremely disheartening for anyone who is in the market for a new home, including repeat and first-time home buyers.
“Many families are putting their dream of owning a home back on the shelf, needing to save more for that down payment–and finding it harder to do so because everything else is expensive, too.
“The cost of groceries, the cost of gas, the cost of healthcare, the cost of a family vacation–you name it, and you are probably paying much more to live than you were in 2020.
“Inflation is a tax paid by everyone and in equal measure. And it’s unfortunately part of a vicious circle that puts even more pressure on the housing market as interest rates go up and stay up.
“Many would say that we are living in a ‘new normal,’ where higher costs are here to stay. If so, then this could have serious implications for economic mobility and prosperity.
“Owning a home should not be only for the well-off; it is the hallmark of a thriving middle class and an essential part of the American dream.
“I think all of us, on both sides of the aisle, will agree that the shrinking pool of eligible homeowners is a cause for concern.
“The solution is not simply to increase federal spending on housing, however, which will only drive up inflation and the demand for housing.
“Our economists here today know very well that inflation is what got us into this mess in the first place.
“I also have a hard time agreeing that more government interference in single family housing is the answer when over 80 percent of the market is federally backed and the Federal Reserve holds a shocking $2.4 trillion in mortgage-backed securities.
“President Biden recently called for a tax credit of $5,000 a year for two years for first-time homebuyers, and $10,000 for some who agree to sell their homes, among other costly proposals. These ideas are both not enough to counter the high costs for homebuyers, and too much for taxpayers who would be forced to subsidize another $260 billion in new spending on housing. That makes me think that they are not serious proposals.
“With the demand for housing that we see today, and the lack of inventory, the answer is not to increase demand further. It is to work together to increase supply. That will take the will of policymakers at all levels of government, as well as the private sector responding to market forces.
“I hope that today’s hearing will provide a forum to discuss credible solutions to our housing challenges as well as what is driving them. I look forward to the testimony of our expert panel of witnesses.”
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