Harris to propose up to $25K in down-payment support for 1st-time homebuyers
Source: ABC News
When Vice President Kamala Harris unveils her economic policy proposals in Raleigh, North Carolina, on Friday, it will include a proposal to provide up to $25,000 in down payment support for first-time homebuyers, according to a campaign official.
The campaign is vowing that during its first term, the Harris-Walz administration would provide working families who have paid their rent on time for two years and are buying their first home up to $25,000 in down-payment assistance, with more generous support for first-generation homeowners.
In a preview statement obtained by ABC News, the campaign says, "Many Americans work hard at their jobs, save, and pay their rent on time month after month. But they can’t save enough after paying their rent and other bills to save for a down payment -- denying them a shot at owning a home and building wealth. As the Harris-Walz plan starts to expand the supply of entry-level homes, they will, during their first term, provide working families who have paid their rent on time for two years and are buying their first home up to $25,000 in down-payment assistance, with more generous support for first-generation homeowners."
"The Biden-Harris administration proposed providing $25,000 in downpayment assistance for 400,000 first-generation home buyers -- or homebuyers whose parents don’t own a home -- and a $10,000 tax credit for first-time home buyers. This plan will significantly simplify and expand the reach of down-payment assistance, allowing over 1 million first time-buyers per year – including first-generation home buyers – to get the funds they need to buy a house when they are ready to buy it," the Harris campaign said.
Read more: https://abcnews.go.com/Politics/harris-propose-25k-payment-support-1st-time-homeowners/story?id=112877568
And I have no doubt that GOPers will be outraged over this because it doesn't directly benefit them.
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ColinC
(11,098 posts)Klarkashton
(5,292 posts)Just raise the price by 25k.
jimfields33
(19,382 posts)
Fiendish Thingy
(23,230 posts)
BeyondGeography
(41,101 posts)Do you envision sellers offering two categories of prices?
Klarkashton
(5,292 posts)BeyondGeography
(41,101 posts)I can see this being a potential issue in developments that are targeting first-time buyers but not for random homes that are offered to all types of buyers.
getagrip_already
(17,802 posts)Tell them you were a cosigner on a condo that was sold. So you dont qualify. They dont have access to your bank records.
Coexist
(26,202 posts)because that's not been my experience. I was told to come up with more down payment
newdayneeded
(2,493 posts)such a thing as an inflated house price. people are putting over 300k on anything with a roof and 4 walls.
CTyankee
(68,201 posts)In the Boston area. People wanna live there. But her house in Sherborn is also worth a lot more. So she is selling that one and getting a house closer into Boston. It seems the closer you get to Boston, the greater the price.
Tribetime
(7,145 posts)Tarzanrock
(1,250 posts)This new housing "proposal" is going to "boom" the American economy like rocket! Just imagine that kind of massive capital infusion of Keynesian economics monies being put into banks, housing construction, construction employment, building supplies, lumbar, concrete, infrastructure for new housing projects, transportation, etc. in small towns all across America. There's usually at least an 8 x "ripple effect" for such things and here that "ripple effect" on the macro and micro economies will likely be 10 x or even higher. This is one of the best economic proposals I have ever heard in my entire lifetime!
Deuxcents
(26,915 posts)Because too many took advantage of the PPL and they were not honest
Clouds Passing
(7,932 posts)
valleyrogue
(2,715 posts)always aimed at married couples with kids, never mind the dramatic shift in demographics toward single adults, and ignoring the very real crisis for millions of us who cannot afford a downpayment, let alone the maintenance, on houses, and cannot even afford an apartment. It is like these politicians are stuck in a 1950s time warp. Everybody is married, everybody has kids, and never mind the realities of the 21st century.
Harris is making the same mistake other politicians make. A house should NEVER be a "wealth-building investment" but a place to live. Humans have to have shelter to survive. Women especially should NEVER have to trade sex with a man to have a roof over their heads, and that is what is implied with "homeownership" for women. It is next to impossible for women alone to afford a stick house on a lot in most parts of the country unless they inherited money or property or got a house or cash through a divorce settlement.
The federal government needs to get serious about the housing crisis for renters. Biden has made some moves in that direction. It is long overdue.
speak easy
(12,598 posts)Always has been for most people. The Federal Government can't control rents, but can encourage building more housing, including affordable housing.
3Hotdogs
(15,368 posts)I watch the negative road signs and letters to editors and local news stories when a farm is going to be sold, sub-divided and become a development. Or when a stand of "old growth" forest (Drew University, Madison, N.J.) is going to be chopped to build condos, houses or whatever.
Houses and land preservation are two competing goals.
getagrip_already
(17,802 posts)Many are apartment units, multi family homes, or other structures not traditionally called single family homes.
But if thays what someone wants, why piss on it?
3Hotdogs
(15,368 posts)L.B.I., a $2m house was torn down to make a $12m house. The same with houses in my town and nearby towns. $1m+ houses to several millions.
---and on and on.
Because of zoning restrictions due to septic system limitations, almost all new housing is single family. These come with loss of trees. The trees are replaced with houses, garages and asphalt. All three are causes of water run-off that leads to flooding.
That's why to piss on it.
getagrip_already
(17,802 posts)Setback restrictions, grouncover requirements, building height limits, sq footage to lot size restrictions.
Dont throw out the baby with the bath water. Not all housing is bad. Not all single family housing is as you describe.
My first house was on a 4500 sq foot lot and was only about 800 sq feet. Most of the homes in the neighborhood were just like it.
Fiendish Thingy
(23,230 posts)It just drives the prices of houses up even higher.
madville
(7,847 posts)The government owns a stake in the homes, like 10%, that the owners either have to pay back when they sell or after 25 years or something. One of the ideas was that the government would eventually financially benefit from the inevitable appreciation of the home values.
Fiendish Thingy
(23,230 posts)Every political party in Canada refuses to consider measures that would actually bring down housing prices, because the FIRE industries are so incredibly powerful, much more than in the US.
Instead of offering cynical programs that help buyers qualify for incredibly high mortgages, they should simply abolish the federal mortgage insurance program, and require lenders to assume all the risk.
If lenders took on all the risk, they would be stricter with the size of mortgages approved relative to income. This would force prices down, or the housing market would simply collapse.
cstanleytech
(28,471 posts)
Grins
(9,459 posts)As does the no tax on tips shit.
Unless it’s couched that it is insurance against default.
SunSeeker
(58,283 posts)Or the ACA?
Or Pell grants?
Or National Parks?
That fact is, all this is paid for by our tax dollars. Steering tax dollars back our way instead of to the rich as tax cuts seems like the right thing to do, no?
Not the same thing at all.
You are trying to compare massive programs for ALL to a singular program for a subset, of a subset, of a subset of people. This is TARGETED at a minority subset of taxpayers. For votes.
It's no coincidence that this was announced in critical electoral state of Nevada, that has a huge and organized group of voters in the service industry. Trump knows this too. (No one thinks Trump, who has stiffed working people all his miserable life, would ever give a shit what happens to people in the service trades.)
SunSeeker
(58,283 posts)They are not a "minority subset of taxpayers." Come on.
questionseverything
(11,836 posts)So renters are a minority
SunSeeker
(58,283 posts)Nationwide, there are only about 250,000 homes currently for sale that are considered affordable for households with between $75,000 and $100,000 in annual income — a sharp decline from the roughly 656,000 available homes prior to the COVID-19 pandemic, a recent analysis by the National Association of Realtors (NAR) found. https://www.cbsnews.com/amp/news/real-estate-home-prices-middle-class-affordability-2022-02-23/
You are not describing that 65% statistic correctly. 65% of Americans do not own their own house. 65.9% of American homes are "owned by their occupants," i.e. not a rental.
https://www.rubyhome.com/blog/homeownership-stats/
That is VERY different from saying that 65% of Americans own their own house. What is happening is several generations are now crammed in that house, because the kids, and grandkids, of the original homeowner can't afford to buy a house. They're just doubling up in that house the grandparents bought back in the 1950s and 1960s when housing was affordable.
The homeownership rate among young adults (25-to-34-year-olds) has declined from 45% in 1990 to 41.6% as of 2021.
The number of first-time homebuyers declined to just 26% in 2022, which is the lowest level since the National Association of Realtors began tracking data.
https://www.nahb.org/blog/2024/01/homeownership-rate-dips-in-fourth-quarter#:~:text=Share%3A,and%20elevated%20mortgage%20interest%20rates.
Home ownership is declining among working adults because they just can't afford it. Unless working people have parents who will leave them their house, most young people see homeownership as impossible, especially in places like California, New York and Florida.
I realize the DU demographic is older, and seniors are more likely to own their own home, so home ownership may not be as much of an issue for us. But the young and average working people are not in the same boat us.
questionseverything
(11,836 posts)But
My grandkids that live with me aren’t renters, they would fall in that 64%
That leaves 36% that rent, the percentage of those folks who would qualify for a loan would be a sub set of a sub set
SunSeeker
(58,283 posts)I don't know how old your grandkids are, but I bet if they're adults they'd love their OWN house, but can't afford it.
madville
(7,847 posts)If a politician makes proposals they can’t deliver on it makes voters bitter. Gotta be careful to not over promise and under deliver.
LymphocyteLover
(9,847 posts)
catchnrelease
(2,151 posts)You know there are going to be a ton of people crying 'Nobody helped me buy my house' or 'I didn't get any money for a down payment' etc. Just like when Biden tries/tried to eliminate student debt-- 'But I had to pay off my loan by myself'. It's great that there might be help available but you know there will be a lot of complainers against the idea only because THEY didn't get any $$.
Zoomie1986
(1,213 posts)Have been left on our own to make our payments despite exorbitant increases in property taxes and insurance. Insurance premiums alone have increased our house payment by 100% within the past 10 years. Oh--and they took away our tax write off for the interest payments. Remember that? Now we're screwed over even more.
All I see is take and take and take, and we get only the satisfaction of having a more or less stable roof over our heads out of it. But don't you dare miss even a payment, or all of that 'investment?' Whoosh! Down the drain!
Being a homeowner doesn't mean it has no hurting to it, you know.
newdayneeded
(2,493 posts)to 12,500 as a favor to greedy landlords. we essentially lost our itemization of property taxes, and mortgage interest. his intent was to make home buyers say, what's the point of buying a house, I can't write anything off anyway? And then they slip into trumps rich buddy's new, VERY expensive apartment complexes.
Freddie
(10,104 posts)Used to deduct state and property taxes, TFG ended that. To punish states like Pennsylvania where we have good schools, pay our teachers decently, and pay taxes for it. Which I’m happy to do so my grandchildren have good schools. But it pisses me off I don’t get a federal tax break for it anymore.
SunSeeker
(58,283 posts)"My neighbor has a cow. I have none. Kill my neighbor's cow."
BeyondGeography
(41,101 posts)Puppyjive
(987 posts)Realtors have too much control over pricing. Appraisers and realtors continue to collude with each other. Investors are buying all the available inventory. The reform needs to start here. Throwing money to first time home buyers is just a band aid.
DeepWinter
(931 posts)What I'm afraid of is this may allow buyers to purchase a home that's actually beyond their ability to keep up with monthly payments. Just like student loans, you can find yourself with debt and payments that don't fit your budget. It might work on paper, but doesn't in your real world money flow. I hope if comes with some solid financial review and advise with their income and expenses.
I say this as someone who owns multiple properties. What I see on paper and what I experience in my checkbook are two different things.
3Hotdogs
(15,368 posts)great sound bite, but useless.
Better proposal? Increased payments to poverty level recipients of Social Security.
questionseverything
(11,836 posts)Plus
Increase subsidized housing for seniors so the seniors homes flood the market reducing rents
Btw dbl the amount of food stamps for low income peops
travelingthrulife
(5,179 posts)Family houses should be for families, not corporate investments.
SunSeeker
(58,283 posts)Within her first 100 days in office, Harris said she would call on Congress to pass the “Stop Predatory Investing Act,” a bill introduced in July 2023 by Ohio Sen. Sherrod Brown that removes tax benefits for large investors that acquire swaths of single-family rental homes. https://qz.com/harris-campaign-housing-rental-costs-real-estate-1851624062
MistakenLamb
(791 posts)One of the only barriers a lot of renters have for home ownership is a down payment on a home. This will help people tremendously
melm00se
(5,161 posts)but this will cause an almost immediate increase of $25K for entry level homes.
getagrip_already
(17,802 posts)Not ability to pay.
Houses will simply remain on the market if they are overpriced in a market with sufficient supply.
Financing changing with ability to pay, not prices.
melm00se
(5,161 posts)but lets look at the reality.
Bob knows that his house is attractive to a 1st time buyer. He knows that any 1st time buyer coming to the table will have an extra $25K available to make a down payment. Knowing this, he adds $25K to his listing price.
This is also done by Mike, Sally, Ann, Laura, Toni and Tony.
Voila.
$25K inflation is now built into the price and this ripples across the market.
getagrip_already
(17,802 posts)Because he/she can buy a nicer house for the same money. The nicer house cant tack on that extra cost because their buyers dont have the incentive.
valleyrogue
(2,715 posts)It started in the mid-1970s with the dramatic influx of married women into the labor force. Greedheads in the real estate industry decided it would be a great idea to start jacking up the prices because now there were two income earners instead of one. Two incomes, more profit. However, at the same time industries were starting to cut back on wages for "male-dominated" fields and later started offshoring those jobs, so married women HAD to be in the labor force, like it or not, to maintain the same standard of living or to be able to afford to "buy" a place to live.
Single people, meaning never-married, especially women, got all but completely shut out of the real estate market from the get-go in most areas of the country.
Shermann
(9,062 posts)In 2010, it provided a refundable tax credit of up to $8,000 for first-time homebuyers and up to $6,500 for other homebuyers with certain restrictions. It was not my first house, so I got the reduced (but still very substantial) credit. I didn't need it, but it was welcome. So, one difference is what appears to be a hard cutoff after first generation homebuyers with this proposal. So, the winners win bigger and there are a lot more losers (questionable campaign strategy). Also, we're not digging out of a Great Recession so that will generate some objections.
pansypoo53219
(23,034 posts)madville
(7,847 posts)Around here all they build are crappy $2000-2500 a month apartments and $300k+ “entry-level” houses. The two bedroom one bath 900 sq ft house I bought for $38,000 in 1997 recently sold for $189,000. Another 1100 sq ft house I bought for $93,000 in 2006 sold a couple of years ago for over $200k, the housing market went nuts during COVID with people moving here (Florida).
I don’t know how any young folks are supposed to get in this market without a significant chunk of family money. A couple of people I work with have gone so far as to buy houses for their kids and basically set it up like owner financing/rent to own.
madville
(7,847 posts)Double edge sword if they aren’t enacted. The voters it initially attracts will become bitter if it doesn’t materialize.
JohnSJ
(98,883 posts)Silent Type
(12,412 posts)time right after war. It might have been 900 square feet.
Have no problem with programs like this proposal to help, but Congress is not likely to pass such legislation. And, if all one can find in cities is 2000 square footers, it won’t help much.
madville
(7,847 posts)A two bedroom one bath I paid $38,000 for in 1997. It recently sold for $189,000. The median home price in my Florida county is $320,000, they don’t build any new houses here under $300k. New townhouses are in the high 200s, there no such thing as new affordable housing here. Even to buy land and put a double wide manufactured home/trailer on it is gonna be $200k all set up.
It’s madness, I did some work in some new 3/3 duplexes on my side of town, they’re all rented at $2800 a month.
Silent Type
(12,412 posts)Of course, in the city I used to live in, Atlanta, a 900 sq ft apartment will probably run $2000+ a month close in.
Doodley
(11,912 posts)
Skittles
(171,709 posts)I'd rather they focus on making home ownership affordable, not feeding into the ridiculous prices.
Yavin4
(37,182 posts)Especially different types of homes like multi-family dwellings. Young families don't necessarily need the huge single family home. More townhouses, multi family units, condos, etc. would work better to help people get their first home and afford additional space if needed.
Mosby
(19,491 posts)Last edited Mon Aug 19, 2024, 11:55 AM - Edit history (2)
The money will be used to cover the down payment and fees, for a first time FHA that's 5% plus closing costs. 25k should definitely cover that for an entry level house. There needs to be some sort of minimum time of ownership otherwise the buyers might try to flip it and recapture (and then some) the subsidy they received. The other issue is what does this do to the demand/supply curve. If the program is popular (why wouldn't it be) then what little supply there is will become smaller, potentially driving up home prices by a LOT.
Eta - this notion that sellers will just increase the price by 25k is wrong, because the subsidy will only apply to first time homebuyers, so the realtor would be stupid to price the house based solely on that.
Overall it's a really well thought out idea, because what is stopping many people from home ownership is the down payment, it's very hard, if not impossible for families to save up 10s of thousands of dollars for a down payment. The unintended consequence like I said is the effect on demand, and what that could do to pricing.