As we talked about in our previous post, the Biden campaign has proposed a first-time home buyer (FTHB) tax credit of up to $15,000, which will function as a true markdown in the price of a house.
Next, we can examine the potential variation in regional impacts via a methodology utilized by Mark Keightley, PhD, an economist at the Congressional Research Service. Keightley performed an analysis of the previous FTHB tax credit that was part of the American Recovery and Reinvestment Act of 2009. He used median home price data in conjunction with estimates of price elasticity of demand—the relationship between house prices and demand for housing—to forecast growth in housing demand.