Biden will urge Congress to give $10,000 to first-time home buyers and $25,000 to help with down payments

President Joe Biden is preparing to push for a massive housing initiative as more and more young adults say they can't afford to buy their first home.

Amid record-high inflation and rising mortgage interest rates, Biden will urge Congress to alleviate mortgage interest rates by offering first-time homebuyers a $5,000 credit each year for their first two years of home ownership to equate a total of $10,000.

The White House says this should equate to essentially knocking off 1.5 percent of homeowners' interest rate for the medium home in the U.S.

In a series of proposals in his State of the Union address on Thursday evening, Biden will urge Congress to help free up some of the housing market by offering a one-year credit of up to $10,000 for families who sell their starter homes.

The average mortgage interest rate for a $300,000 loan is 7.9 percent for a 30-year fixed term. Meanwhile, the average cost of a home in the U.S. is upwards of $400,000.

President Joe Biden will urge Congress to pass massive relief to try and provide aid by inject the housing market with more first-time homebuyers and encourage families to move out of their starters homes

Inflation rates saw massive spikes after the pandemic. Last month it neared 7 percent and as of March 7 sit at 7.9 percent for a 30-year fixed mortgage for a $300,000 loan. The average costs of a home is more than $400,000

A fact sheet from the White House on the proposals reads: 'President Biden believes housing costs are too high, and significant investments are needed to address the large shortage of affordable homes inherited from his predecessor and that has been growing for more than a decade.'

'During his State of the Union Address, President Biden will call on Congressional Republicans to end years of inaction and pass legislation to lower costs by providing a $10,000 tax credit for first-time homebuyers and people who sell their starter homes; build and renovate more than 2 million homes; and lower rental costs,' the release adds.

With rising home costs and higher interest rates over the past few years, first-time homebuyers and young families are finding it harder than ever to purchase their first or second home.

Biden has previously called on Congress to provide $25,000 in down payment assistance for first-generation home buyers. He will reiterate that push during his State of the Union address to a joint session of Congress.

Additionally, Biden wants relief for renters and will ask Congress to look at expanding the low-incoming housing tax credit. The president plans to unveil a $20 billion grant fund in his budget released later this month to support construction of affordable multifamily rental units.

While Congress might not act on any of this, Biden can take some unilateral actions to address housing issues.

Biden wants to encourage first-time home buyers, families with starter homes and first-generation home buyers to get into a house or a new house with rising costs and interest rates. Pictured: A home for sale in Austin, Texas on February 21, 2024

The White House has faced criticism, however, for not being aggressive enough on housing and renting issues – especially post-pandemic when all other costs are also on the rise.

The housing market has been strained for a few years from multiple facets.

There is a shortfall of millions of homes in the U.S. and the Federal Reserve's fight to try and tame inflation prompted a quick skyrocket in mortgage rates that were sitting below 3 percent just a few years ago and are now pushing 8 percent.

The interest rates coupled with high costs for a home are pushing many potential buyers out of the market.

Rent costs also soared during the pandemic and was a top driver of spiking inflation.