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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 26 April 2024 C O V E R S T O R Y A WORK IN PROGRESS With the White House announcing a raft of housing-related proposals in the State of the Union, MortgagePoint asks industry experts and economists to gauge how effective they could be ... and if they have a shot of being implemented. B y DAV I D W H A R T O N L ife, liberty, and the pursuit of happiness. Since that phrase appeared in the Declaration of Independence, the American experiment has been a work in progress to determine not only what they mean, but how to use the instruments of both the government and the private sector to enable the citizenry to pursue them. In the twentieth century, that pursuit often became associated with a concrete ideal: the American Dream of homeowner- ship—white picket fence optional. Even before our own heavily partisan and divided age, the conversation about how best to expand access to this Amer- ican Dream for as many as can responsi- bly carry it has been a work in progress. In the years since the pandemic, the market has been defined primarily by rising rates, rising home prices, and not enough inventory to go around. How can both government forces and the private sector of the mortgage industry shape the 21st century's chapter of this long story? Will it prove to be a chapter of progress and accomplishment, or gridlock and frustration? On March 7, President Joe Biden delivered his 2024 State of the Union Address to the nation. Among the many topics he addressed were several initia- tives designed to address various aspects of the U.S. housing economy, ranging from homeowner tax credits to adjusting insurance fee requirements for federally backed loans. There was much to digest, and the cause of promoting and strength- ening American homeownership was certainly a worthy one. However, most of the problems being targeted—such as home affordability, insufficient housing inventories, and driving down rental prices—are neither new nor easily solved. With a long history of federal intervention in the housing market—some more effective than others—were these new initiatives positioned to make a real difference for Americans? To find out, MortgagePoint spoke with an array of industry insiders, economists, and policy experts to get their feedback on whether these latest proposed actions will have the intended impact on the housing economy, or if they will prove to be a case of good intentions leading to unintended consequences. The State of the State of the Union D uring the State of the Union, Pres- ident Biden said that he wants to create a temporary, two-year tax credit that will give homeowners $400-per- month to put towards their mortgages when they buy a first home or trade their home in for one with a little more (or less) space as their needs change. Biden also announced that he is di- recting federal agencies to eliminate title insurance fee requirements for federal- ly-backed refinance loans. He stated this move alone could save the average home- owner $1,000 or more in refinancing fees. He also advocated "cutting the red tape" so homebuilders can get more federal financing, which, according to him, is already helping build a record 1.7 million dwellings nationwide. He then called upon Congress to make his housing plan a law that would build and renovate two million affordable homes, which would also be intended to help lower rental prices for those who do not own a home. "The lack of affordable housing supply is hurting the middle class and D A V I D W H A R T O N , Editor-in-Chief of MortgagePoint, has nearly 20 years' experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. He can be reached at David.Wharton@ thefivestar.com.