(The Center Square) – U.S. Sens. Ruben Gallego, D-Arizona, and Todd Young, R-Indiana, introduced a bill to help first-time homebuyers.
The senators last week presented the Uplifting First-Time Homebuyers Act, which would allow Americans attempting to buy their first home to increase the Individual Retirement Account tax exception’s withdrawal limit.
Currently the withdrawal limit is $10,000, but this bill would increase it to $50,000. When Congress set the limit in 1997, the average price of a median home sold was $145,000, according to the Federal Reserve Bank of St. Louis. Fast forward to 2025, and the average median home price being sold is around $417,000.
If individuals withdraw more than $10,000 from their IRA, they currently will face a 10% early withdrawal penalty.
The cornerstone of the American dream is homeownership, Gallego said. “Owning a home is a proven way to build generational wealth and retirement security.”
The senator pointed out many young Americans “feel like that dream is out of reach.”
“By updating the decades-old IRA homebuyer exception to reflect the reality of housing costs today, this bill helps make homeownership possible for the next generation,” he said.
Young noted homeownership is crucial to “strengthening families, building generational wealth and cultivating stronger communities.”
“By updating the IRA withdrawal limits to better match the realities of today’s economy, our bill will unlock more opportunities for Americans to become homeowners and invest in their future,” the senator from Indiana explained.
As of 2024, the current age of the average first-time homebuyer was 38 years old, representing a historic low of 24% of the market share, according to the National Association of Realtors.
Gallego’s and Young’s bill has the support of numerous organizations, such as the National Association of Realtors and the National Housing Conference.
This bill is a “smart, targeted step toward making homeownership more attainable.” Shannon McGahn, executive vice president of the National Association of Realtors, said.
“By updating the outdated IRA withdrawal limit, this bill could give first-time buyers greater access to their own savings at the moment they need it most,” she said.
McGahn noted the proposal aims to enable more Americans to own a home earlier in life and build “equity and long-term financial stability.”
