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Real-estate stocks were mostly in the green in Friday midafternoon trading as President Joe Biden proposed a laundry list of actions to reduce housing costs and boost supply, citing concerns about elevated mortgage rates and a shortage of homes for sale.
Real estate brokerages Redfin (NASDAQ:RDFN) climbed 12.3%, Re/Max Holdings (RMAX) gained 3.5%, Zillow Group (NASDAQ:Z) (NASDAQ:ZG) +3.7%, Compass (NYSE:COMP) +1.3% and Opendoor Technologies (NASDAQ:OPEN) +4.2%.
Mortgage REITs AGNC Investment (NASDAQ:AGNC) +0.7%, Chimera Investment (NYSE:CIM) +0.5%, New York Mortgage Trust (NASDAQ:NYMT), Invesco Mortgage Capital (NYSE:IVR) +0.7% and Dynex Capital (NYSE:DX) +0.2% all gained at the time of writing. Home-rental REITs: Invitation Homes (NYSE:INVH) +1.1%, American Homes 4 Rent (NYSE:AMH) +1.2% and Bluerock Homes Trust (NYSE:BHM) +4.3%.
The Biden administration on Thursday laid out a number of proposals that aim to lower the current high cost of homeownership, including providing a $10K tax credit for prospective homebuyers and people who sell their starter homes.
"This is the equivalent of reducing the mortgage rate by more than 1.5 percentage points for two years on the median home, and will help more than 3.5 million middle-class families purchase their first home over the next two years," the White House said in the factsheet.
Though such tax credits, if approved, would bode well for the housing market through increased supply, "we are bearish on any tax-credit making its way through Congress by the end of Biden's term, and particularly if the House remains controlled by the Republicans," BTIG analyst Soham Bhonsle wrote in a note to clients.
Biden is also calling on Congress to pass legislation to build and renovate over 2M homes, as part of its effort to "close the housing supply gap and lower housing costs for renters and homeowners," the release said.
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