Whitehouse, Shekarchi, Rivera call for passage of U.S. Senate bill to make homeownership more affordable

Whitehouse bill would address dramatic increase in housing costs that is preventing families from getting a foothold in the middle class

From a press release:

United States Senator Sheldon Whitehouse, Rhode Island House Speaker Joseph Shekarchi, and Central Falls Mayor Maria Rivera joined local housing advocates to call for passage of Whitehouse’s new legislation to expand homeownership among lower- and middle-income Rhode Islanders. Whitehouse’s First-Time Homebuyer Tax Credit Act would establish a refundable tax credit worth up to 10 percent of a home’s purchase price – up to a maximum of $15,000 – for first-time homebuyers. This morning’s event was held inside a newly constructed affordable home in Central Falls.

“Owning a home is at the core of the American dream, and it has been pushed further out of reach for more Rhode Island families over the last few years,” said Senator Whitehouse. “My legislation will make homeownership, which provides a stable foothold in the middle class and a straightforward way to build wealth, a reality for more families. I am grateful for the support of Speaker Shekarchi, a great champion for housing affordability in the Ocean State.”

“Homeownership provides families with security and stability – emotionally, physically, and financially. Unfortunately, the dream of home ownership is getting more out of reach for too many people,” said Speaker Shekarchi. “I applaud Senator Whitehouse for his leadership in proposing this significant tax credit, which will make homeownership more affordable and sustainable for working families.”

In 2022, the median sale price for a home in the United States was 5.6 times higher than the median income and a higher ratio than during the years immediately preceding the 2007 mortgage crisis.

There are no communities in Rhode Island where families earning the state’s median income can afford a typical home. Nationwide, the shortage of affordable housing opportunities costs the American economy an estimated $2 trillion each year. High housing costs reduce disposable income and economic mobility, stifling economic opportunities for those who can no longer afford housing and their communities.

Housing unaffordability is uniquely problematic for young people who are struggling to reach the same milestones as their parents at the same age. The typical age of a first-time homebuyer reached a record high of 36 in 2022, up from 29 in 1981. In 2022, first-time homebuyers made up just 26 percent of all homebuyers nationwide compared to 38 percent in 1981.

Under the First-Time Homebuyer Tax Credit Act, taxpayers could receive the credit when they purchase by working with their mortgage issuer. Alternatively, taxpayers could elect to treat the purchase of their home as occurring in the prior taxable year to receive the credit before tax season if they cannot qualify for the credit at the point of sale.

The credit phases out for homebuyers making above 150 percent of the area median income and for those buying a house with a purchase price above 110 percent of the area median purchase price. Additionally, the credit is limited to home purchases financed through federally backed-mortgages.

“Creating access to homeownership for first-time home buyers is critically important. Starter homes are the first step to building wealth for our families, communities, and economy,” said Jennifer Hilton, Past President of the Newport County Board of Realtors.

The First-Time Homebuyer Tax Credit Act was introduced in the United States Senate and House of Representatives earlier this month. The First-Time Homebuyer Tax Credit Act was introduced in the United States Senate and House of Representatives earlier this month. The legislation has been endorsed by the Rhode Island Department of Housing, RIHousing, the Housing Network of Rhode Island, HousingWorks RI at Roger Williams University, the National Association of Home Builders, the National Association of REALTORS, Rhode Island Association of REALTORS, and the Cooperative Credit Union Association.