Housing is the sleeper issue of the 2024 campaign

Vice President Kamala Harris cast tie-breaking votes that ensured passage of the American Rescue Plan Act, the Inflation Reduction Act and the Biden budget. In doing so she unleashed a wave of inflationary spending hitting all Americans, but none harder than potential home buyers. To prove that nothing has been learned from that experience, the Harris campaign has proposed a housing agenda of more government cash and greater command-and-control. The economic harm will far exceed any benefit.

A house that cost $303,600 in January 2021 now costs $422,600. Mortgage rates that were 2.8% are now 6.5%. Home prices 40% higher have combined with mortgage financing costs up 125% to double new home buyers’ average monthly mortgage payment, to $2,671 from $1,247. This has pushed the housing and rental affordability indexes to 30-year lows, the inflationary consequence of shoving three years of federal spending into only two years. Housing is the sleeper issue of the 2024 election.

Instead of correcting these mistakes, Ms. Harris proposes to double down on the Biden plan to give first-time home buyers $25,000 in down-payment support along with a $10,000 tax credit. Other proposals include establishing new tax incentives to build starter homes, expanding the tax incentive for affordable rental housing, doubling to $40 billion subsidies for housing construction, and dedicating some federal land to affordable housing.

Doubling down on the Biden agenda raises two problems. First, in 2023, the federal deficit was $1.67 trillion, more than the $1.592 trillion value of all 4.09 million homes purchased at an average price of $389,300. Since 1989, the federal government has never borrowed annually more than the dollar total of sold homes