Home prices across the nation are back up near a record high. That makes this a particularly bad time for the Biden administration to have rolled out its new 'green' energy mandates, which will add $31,000 to the cost of a new home. The mandates are being pushed through the Department of Housing and Urban Development and while they technically won’t apply to all homes, all home builders will effectively be forced to comply with them.
argues that homebuilders will be able to get tax credits, via the Inflation Reduction Act, to offset some of these costs, with those savings hopefully passed along to homebuyers. However, this is not a real reduction in costs; it’s merely passing the buck to taxpayers. Instead of a homebuyer bearing the full freight of these 'green' energy mandates, some of the cost will be passed on to taxpayers, including renters.
With the average monthly rent for a home up 50% in just four years and the cost of other necessities like food, clothing and energy also skyrocketing, many Americans have nothing left to save at the end of the month. Small wonder the average savings rate today is less than half what it was before the pandemic. That means many renters can never afford to save for a down payment, so they’re stuck renting forever.
These new 'green' energy mandates will worsen conditions in the frozen housing market for the same reason that other failed public policy caused the mess in the first place: they increase prices. Runaway government spending caused 40-year-high inflation that drove up prices everywhere, including for housing.
Thus, the supply of new and existing homes has been severely curtailed. The growth in apartment buildings will likely fall sharply and soon, too. Forward-looking indicators like building permits are declining and the number of job openings in construction fell in March by the biggest drop on record. Less construction of apartments will mean even more upward pressure on rent prices. Americans need relief, not regulation, in their struggle to find affordable housing. CLICK HERE FOR MORE FROM E.J.
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