Proposals for a $1 billion-a-year down payment assistance programme for first-time homebuyers are now being considered by California lawmakers.
Buying a home in California is becoming more and more difficult as the cost of living continues to rise.
First-time homebuyers in California may soon be eligible for a $1 billion-a-year down payment assistance programme.
According to San Luis Obispo realtor Kim San Jule, “we simply don’t have enough homes for the number of people who want to live in our area.”
People on the Central Coast and throughout California are finding it increasingly difficult to purchase a home.
“It’s extremely difficult for first-time homebuyers to get their foot in the door. It all comes down to two things: a lack of supply and, of course, a high price “It was Deputy Chief Economist for the California Realtors’ Association Oscar Wei who made these remarks.
A lack of housing, rising interest rates, and high demand are all contributing to the problem.
In light of people’s increased ability to work from home due to this outbreak, San Jule believes that everyone has become aware of the Central Coast’s advantages. “As you and I are aware, there is no better place to live.”
Household incomes are rising, but they are not keeping pace with mortgage payments, which is creating a widening gap.
A 20% down payment on a typical California house, for example, equates to around $160,000. This is less than half of what the average household makes, at about $80,000.
According to Wei, the “housing affordability index,” which measures the percentage of households that can afford a median-priced home, has dropped from 33% in 2020 to 20% in the first quarter.
Shortly, the index of housing affordability will likely fall to a level below 20%. It’s the steepest drop since the housing bubble burst before the Great Recession.
The California Dream For All program, which assists with the down payment for first-time homebuyers, is now being considered by the state of California.
We need to read the fine print before allowing more people to live in their own homes,” San Jule warned.
The programme would give first-time homebuyers 17 per cent toward their first home. If the homeowner decides to sell or refinance, the state will get its money back.
This programme, which is being spearheaded by California Senate Leader Tony Atkins, a San Diego Democrat, will allow more people to break free from the cycle of renting, become the first in their families to own a home and provide a foundation for their children and grandchildren’s future success.
A programme to help people with their down payments, according to Wei, is the first step. “We’d like to build more houses. I believe that the most important thing in California is to continue to build more homes.”
Some experts believe this will go some way in the right direction, but a lack of supply for the high demand is the real issue.
An assistant professor at the USC Price School of Public Policy opined, “I don’t think it will be large enough to make a dent.” As long as the programme is large enough, it will help some people buy a home, but if the demand exceeds the supply, prices could rise even more.
As part of the state budget, the bill is moving through the California Legislature.