So after about a day or so in office Trump has already made a few moves that might already screw over the already "Don't Hug Me with Both Arms" American economy.
Although we raved about the price of rent going down recently, buying a home is a different matter that few New Yorkers dream of.
But thanks to our President, that’ll remain a dream for most people.
As one of his first priorities after taking oath today, President Donald Trump suspended a January 9th ruling from the Department of Housing and Urban Development that was meant to reduce the cost of mortgage insurance for first-time homebuyers.
The Federal Housing Administration rule was set to lower the premiums of mortgage insurance, which is required for homeowners when they take out a government-backed housing loan.
As first-time buyers know, these premiums are pricey and can drive up the cost of monthly payments. The FHA estimated that the new rule would help about one million homeowners who have FHA loans and save the average homeowner $500 per year.
That $500 could’ve gone to other necessities like the metrocard, phone bills, and groceries. But apparently republicans didn’t reducing the payments by that margin. What a shocker.
As reported by Curbed NY, some Republicans felt the higher premiums helped to protect the country against risky loans that could put the country back into a foreclosure crisis.
But in a statement January 9th, outgoing HUD Secretary Julian Castro said there was no danger of this happening. "After four straight years of growth, and with sufficient reserves on hand to meet future claims, it's time for FHA to pass along some modest savings to working families.”
Also, most applications for loans ask for the annual income of the household or lender to determine if said lender or household can actually pay a loan off within a reasonable amount of time with other expenses considered. And if you can’t, you usually get denied.
But hey, we’re not bankers.
With this move, Trump’s team may be moving forward with his plan to roll back many recent reforms which were put in place to battle discrimination in the housing market.
Eliminating a simple, cost-saving way to reduce monthly payments for the people who need it most could have been a motivating incentive for first-time buyers.
In the midst of a housing shortfall that’s made most large cities unaffordable to the average citizen, this decision may deny even more Americans the dream of homeownership.
Instead, there’s an estimate of roughly 750,000 to 850,000 homebuyers facing higher costs and 30,000 to 40,000 new homebuyers tossed to the side.
Perhaps it’s better to just rent then? At least only a lease can tie you down that way.[via Curbed NY] [Feature Image Courtesy Curbed NY]