A housing subsidy would likely spur demand. But it’s supply that’s the problem afflicting the housing market.
First-time homebuyers and working families could see up to $25,000 in assistance on down payments, according to a plan set to be unveiled by the Kamala Harris campaign on Friday. But some economists and housing experts expressed skepticism that the proposal would address the crux of the current housing crisis — namely, that there’s too much demand for not enough supply.
Ahead of a speech in North Carolina on Friday, the Harris-Walz campaign released its first economic policy agenda, focused on lowering costs for American families. Among the ideas floated in the proposal is giving $25,000 to more than a million first-time buyers who have a history of making their rent payments on time.
There would be “more generous support for first-generation homeowners” according to a preview of the remarks Harris is set to deliver Friday.
Combined with a new child-tax credit and other tax incentives set to be unveiled, along with the White House’s recent negotiation of Medicare prescription drug prices, the policies amount to a sweeping economic agenda meant to address the one issue that voters consistently say is top of mind: the cost of living.
But Harris’ housing policy, the details of which are still to be confirmed, would not fix the underlying supply and demand issue, as well as stubbornly high interest rates, that have made the prospect of buying a home so unaffordable for so many.
“Housing prices spiked during the pandemic, but housing prices have been an issue for a long time”, Scott Lincicome, the vice president of general economics at the libertarian Cato Institute told Newsweek.
