Vice President Kamala Harris is set to announce a new proposal aimed at helping first-time homebuyers enter the housing market. This proposed policy, like all of her plans, raises serious questions about its potential impact on inflation, not to mention fairness to taxpayers.
Harris plans to unveil a program offering up to $25,000 in down payment assistance to first-time homebuyers. To qualify, individuals must have a two-year history of on-time rent payments. The campaign claims this will help those who struggle to save for a down payment while paying rent.
“For many Americans, paying rent and other bills makes it nearly impossible to save for a down payment, effectively locking them out of the housing market,” Harris’s campaign stated. “This plan will give them the opportunity to own a home and build wealth.”
Lowering costs for Americans is one of our campaign’s top priorities.
I am heading to Raleigh, North Carolina to speak about how we will continue building an economy where every American has the freedom to thrive. See you soon!
— Kamala Harris (@KamalaHarris) August 16, 2024
But let’s take a closer look at the potential consequences of this proposal.
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First, there’s the inflation concern. When you inject a large amount of money into a market, prices tend to rise. It’s basic economics. Sellers, aware that buyers suddenly have an extra $25,000 to spend, might simply raise their prices accordingly. This could negate any benefit to the buyers while driving up housing costs for everyone else.
Neither Harris nor Walz have worked in the private sector in their professional careers and it shows. If the gov’t provides $25K for a down payment, the cost of the home will go up by $25K to capture the subsidy, plus the actual value. https://t.co/q4CFGuBKbT
— Erick Erickson (@EWErickson) August 16, 2024
Then there’s the question of fairness. Why should taxpayers foot the bill for others to buy homes? Many Americans have worked hard to save for their own down payments without government assistance. Is it fair to ask them to subsidize others’ home purchases?
The proposal also lacks crucial details. We don’t know the total cost of this program or how it will be funded. With soaring national debt and inflation concerns, these are huge concerns.
It’s worth noting that this isn’t Harris’s first foray into market intervention. She previously suggested imposing government-controlled pricing on grocery stores to combat rising food prices. This pattern is just a continuation of the Biden-Harris administration’s trend of throwing money at complex economic issues which has disastrous consequences.
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This plan risks fueling inflation in the housing market, unfairly burdening taxpayers, and potentially distorting market dynamics.
