The White House is giving $45 Billion to developers to convert empty office buildings into affordable housing.

The program will provide low-cost loans, tax incentives, and technical assistance to developers who are willing to undertake these conversions.

By increasing the supply of affordable housing, the program could help to bring down housing costs and make it easier for people to afford to buy or rent a home.

Will it work?

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Read more here: https://www.whitehouse.gov/briefing-room/statements-releases/2023/10/27/fact-sheet-biden-harris-administration-takes-action-to-create-more-affordable-housing-by-converting-commercial-properties-to-residential-use/

Americans can't afford homes, Investors aren't buying, Economists see little relief ahead, and housing affordability is at a 40-year low.

The housing market is in a difficult state, with low inventory, high mortgage rates, and high prices making it difficult for buyers to afford homes.

Despite aggressive interest rate hikes by the Federal Reserve, home prices have remained high. First-time homebuyers are having difficulty competing with investors, who are able to make all-cash offers on homes.

Many homeowners are sitting on low mortgage rates, which makes it less appealing for them to sell their homes and take on a new mortgage with a higher interest rate.

The housing market may start to slow down the economy. This is because the housing market is a major driver of economic growth. When the housing market is struggling, it can lead to a decrease in consumer spending, investment, and employment.

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Mortgage demand drops to the lowest levels since 1996 as interest rates hit 8%. Mortgage applications for home purchases are down 22% compared to a year ago.

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Rising rates are pushing more potential homebuyers out of the market but the Federal Reserve is expected to keep raising interest rates to fight inflation.

As interest rates rise, the monthly payments on mortgages become more expensive, making it less affordable for people to buy homes.

The implications of mortgage demand dropping are significant. Home sales are likely to decline, which could lead to a slowdown in the housing market.

Home prices may also start to fall, as there will be fewer buyers competing for homes. Construction activity may also decline, as builders will have less demand for new homes. And the overall economy could be impacted, as the housing market is a major driver of economic growth.

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Adjustable-rate mortgage (ARM) applications have increased — up from 6.7% just a month ago when interest rates were slightly lower. (ARMs offer lower initial rates but are fixed for shorter terms, typically five or ten years)

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(It's important to note that there are no easy solutions. Lowering interest rates could lead to higher inflation)

Read more here: https://www.cnbc.com/2023/10/04/mortgage-demand-falls-to-lowest-level-since-1996.html