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Midterm elections were held on November 8, but it is still unclear who will control Congress. The New York Times reports that Republicans appear to have the upper hand in the U.S. House of Representatives. The Senate remains contested and may not be decided until next month when a runoff between Georgia Senator Raphael Warnock and his challenger Herschel Walker takes place.
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The election results so far have been much closer than many expected, even if the Republicans ended up controlling one or both houses of Congress. If that happens, the U.S. real estate market could be affected in several different ways, according to a new Cowen report.
Cowen analyst Jarrett Sayburg writes that the Republican-led House will likely mean the end of the first-time buyer tax credit, MarketWatch reported. It was intended to give the purchaser a refundable federal tax credit of up to $15,000. Democrats tried to pass it through a settlement bill last year, but a new settlement bill is unlikely to pass in the Republican-led House of Representatives.
Another provision of the settlement bill, rehab housing, is also likely to fail under the Republican Congress, Seiberg said. Billions of dollars would have been spent on the purchase.
“It’s hard to see how this will go through the Republican House,” Seiberg said.
Affordable housing measures passed in some cities
However, there is good news for affordable housing advocates. At the municipal level, voters in some cities have approved increased spending on affordable housing, NPR reported.
Kansas City voters approved $175 million in bonds for “very affordable” housing with rents ranging from $550 to $750 per month. Voters in Austin, Texas, approved the largest mortgage bill in the city’s history, while in Palm Beach County, Florida, voters added $200 million in property taxes to slash development costs, according to unofficial results. Authorized to encourage builders to build affordable housing.
Back at the federal level, Republican lawmakers are likely to put Fannie Mae and Freddie Mac under government guardianship, Seiberg noted. But that probably won’t happen under the Republican Congress.
Finally, regardless of who controls Congress, Federal Housing Administration (FHA) loan premiums remain low.
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“President Biden already has an FHA commissioner, [Housing and Urban Development] Place a secretary. That’s why even a Republican sweep shouldn’t stop Team Biden from lowering FHA premiums,” Seiberg wrote. I anticipate.”
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