CNN’s, WaPo’s Rampell: Harris’ Homebuyer Tax Credit Will Drive Up Prices

On Friday’s broadcast of CNN International’s “First Move,” CNN Economics and Political Commentator, Washington Post columnist, and “PBS NewsHour” Special Correspondent Catherine Rampell stated that 2024 Democratic presidential candidate Vice President Kamala Harris’ proposed tax credit for first-time homebuyers “is likely just going to get passed along in the form of higher prices” due to constrained supply.

Rampell said, “The problem is, unfortunately, the federal government doesn’t have a lot of power over the obstacles that have been holding back housing. At the state and local level, that’s where you’re seeing problems with red tape, with permitting issues, zoning, things like that, NIMBYism. And so, what really needs to happen is more effort at the state and local level to make it easier to build. She talked about wanting to work with states and localities, and I hope she does, but again, there just aren’t that many tools at her disposal. She had mentioned, both today, and in materials sent to reporters earlier, that she was going to push for another tax credit, a new kind of tax credit to encourage more building for homes of first-time homebuyers. I’m not exactly sure how that will work, but at least it’s kind of in the right direction.”

She continued, “I’m more concerned about another policy that she had — she has released on housing to give first-time homebuyers, I think it was a $25,000 tax credit, which sounds nice, but demand is already really strong. If you do have constrained supply, that tax credit is likely just going to get passed along in the form of higher prices. It’s just going to make housing prices, … maybe not the full $25,000, but more expensive. It’s going to go into the pocket of sellers. So, subsidizing demand, not going to be super useful, but the supply stuff, if they can get it done, would be helpful.”

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