By Hank Russell
Now that a federal housing bill has become law, a local real estate expert said this will help alleviate the housing crisis in most parts of the U.S., but it will “probably not … make a difference” in the northeastern region.
On June 24, Congress passed the 21st Century ROAD to Housing Act, which they say will help bring housing costs down. However, when the bill reached President Donald Trump’s desk, he refused to sign it because the Senate had yet to pass the SAVE America Act, a voting bill Trump has been pushing as his top priority over other pieces of legislation.
“I will not sign the Housing Bill, which has been fully approved by Congress and sent to the White House, in PROTEST over the fact that the United States Senate is not capable of passing THE SAVE AMERICA ACT,” Trump posted on social media, according to The New York Times.
On July 11 at midnight, a day after Trump — who initially supported the legislation — said again that he would not sign it, the housing bill automatically became law. According to CNN, it became law because Trump only refused to sign the bill, but did not veto it.
Among the provisions of the Road To Housing Act, as reported by CNBC, include restrictions on how many private homes that institutional investors can own, expanding the construction of manufactured and factory-built homes and pilot programs to make small mortgages — that is, mortgages under $100,000 — more accessible to borrowers.
But Joe Moshé, the broker and owner of Charles Rutenberg Realty, said most parts of this country will see improvements in the housing market, but not all. Moshé specifically pointed out that the northeast region of the U.S. will probably miss out. According to the National Association of REALTORSⓇ, the preliminary Housing Affordability Index (HAI) last month was 86.8. While that is higher than the Western region’s HAI of 77.3, it is lower than the Midwest’s (126.4) or the South’s (110.5). In addition, the Northeast’s HAI in June was lower than it was in May (92.9).
An HAI below 100 means a family with a median income — for the Northeast region, it is $123,915 — does not have enough income to qualify for a mortgage loan for a typical home. According to the NAR, someone who wants to buy a home in that region would need to make at least $142,704 a year to get a mortgage on a median-priced home, assuming a 20% down payment. (A median-priced home in the Northeast is $583,700, based on NAR data.)
“Will this housing bill make a major difference in the housing market in the northeast?” he said. “Probably not, but it will help our country and that is a major first step in our broken political system.”
Moshe said both sides of the aisle “worked together to create a bill” that he said “is for the benefit of the country” instead of just one political party. “ Let’s hope this first step is the beginning of major changes in the housing and real estate industry.”