MarketWatch reporter Aarthi Swaminathan recently analyzed a new report from investment bank Cowen on how the 2022 elections could be critical for the housing market. The report by Cowen’s Jaret Seiberg noted that this year’s midterms will determine which party controls the House and the Senate for the next two years and the result will then impact a number of issues related to housing finance policy, including first-time buyer tax credits, funds for rehab housing, no reform for Fannie and Freddie, among others.
First-time buyer tax credit gone
Assuming Republicans “will at a minimum gain control of the House,” Seiberg wrote, that likely means no first-time buyer tax credit.
The tax credit was, through a revision of the Internal Revenue Service tax code, to give first-time home buyers up to $15,000 in refundable federal tax credits. Democrats tried to pass the tax credit last year through a so-called reconciliation bill, Seiberg noted. But a new reconciliation bill is unlikely, he added.
Unlikely to get funds for rehab housing
The original reconciliation package had another big housing component — rehab housing.
The package had earmarked billions in funds to construct, renovate, or purchase affordable public housing, Seiberg noted, which would help with rental housing. “It is hard to see how this gets past a GOP House,” he noted.
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