RALEIGH, N.C. (WNCN) — While campaigning in Raleigh Friday, Vice President Kamala Harris shared her plan for the economy if she becomes president. She said a goal of that plan is to make it easier to afford a home and is proposing giving first-time homebuyers up to $25,000 towards a down payment.
Kamron Lusk, a real estate agent with Pappalardo Real Estate Group who works throughout the Triangle, said the average first-time homebuyer he works with buys a home for about $350,000. He notes a down payment is not the only barrier they face.
“Closing costs can be 3 to 3.5%, along with having that liquid capital or liquid cash to put towards the due diligence,” He said. “A down payment is just a piece of that puzzle.”
Lusk said without all the details of how Harris’ plan would work, it’s hard to say how it could impact the housing market. “It could potentially inflate prices, but also potentially help people,” he said.
Harris is also proposing building 3 million new homes and rentals that are affordable for the middle class by the end of the first term. Lusk said that is an important aspect of the plan.
Michael Walden, an economist and Reynolds Distinguished Professor Emeritus at NC State University, said both the down payment assistance and the building component are needed for the plan to work. “I think that actually the supply side is the more important,” he said.
When asked if he believes selling prices would increase if buyers are getting assistance, Walden said, “They could. That’s where I emphasize making sure we’ve got a supply component going commensurately with that. That’s a hard question to predict by itself.”
Raleigh renters Elliott and Amanda Holmes are eyeing their next step. They are hopeful a plan like this could work for them.
“I guess a big hurdle for us is paying rent and also trying to save extra to have enough for a down payment down the line,” Amanda said.
Said Elliott, “[It’s] really inspiring. We’d like to know more about the details. It’s first we’re hearing of it, but we would be very interested in that.”
Under the down payment assistance plan, people would need to pay rent on time for two years, but beyond that, it’s not clear what other requirements there could be and if there would be an income limit.
