Biden’s Latest Housing Proposal Is Like a Bad Credit-Card Promotion

During the pandemic, rock-bottom interest rates and a desire for more space drove a rapid and stunning rise in housing prices. While prices have moderated from their peak, they have not done so nearly enough to make up for the more than doubling of borrowing costs. President Biden says he has a solution, but like most forms of government interference, it would only make the problem worse.

During the State of the Union address, Biden unveiled a plan to give homebuyers $400 per month for mortgage payments over the next two years “as mortgage rates come down.” It didn’t take long for most people with a basic understanding of economics or an ounce of common sense to recognize that government subsidies — especially during a time of falling interest rates — would lead to more demand and, thus, even higher housing prices.