{"id":13342,"date":"2024-10-10T20:57:26","date_gmt":"2024-10-10T20:57:26","guid":{"rendered":"https:\/\/wifamily.news\/?p=13342"},"modified":"2024-10-10T21:12:18","modified_gmt":"2024-10-10T21:12:18","slug":"aei-report-harris-housing-plan-will-cost-milwaukee-homebuyers-thousands","status":"publish","type":"post","link":"https:\/\/wifamily.news\/?p=13342","title":{"rendered":"AEI report: Harris\u2019 housing plan will cost Milwaukee homebuyers thousands"},"content":{"rendered":"<p>This post originally appeared at <a href=\"https:\/\/www.badgerinstitute.org\/aei-report-harris-housing-plan-will-cost-milwaukee-homebuyers-thousands\/\">https:\/\/www.badgerinstitute.org\/aei-report-harris-housing-plan-will-cost-milwaukee-homebuyers-thousands\/<\/a><\/p>\n<div style=\"height:2px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<div class=\"wp-block-image\">\n<figure class=\"alignright size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"754\" src=\"https:\/\/e74sq7k37a8.exactdn.com\/wp-content\/uploads\/2024\/10\/harris-housing-plan-costs-milwaukee-home-buyers-web-1024x754.jpg?strip=all&amp;lossy=1&amp;ssl=1\" alt=\"First-time homebuyers in Milwaukee realizing the hidden costs of Kamala Harris\u2019s housing plan\" class=\"wp-image-53676\" style=\"width:344px;height:auto\" \/><\/figure>\n<\/div>\n<p>Vice President Kamala Harris\u2019 new housing <a href=\"https:\/\/mailchi.mp\/press.kamalaharris.com\/vice-president-harris-lays-out-agenda-to-lower-costs-for-american-families\" target=\"_blank\" rel=\"noreferrer noopener\">down payment assistance proposal<\/a>, which would give $25,000 to qualifying first-time home buyers, would dramatically increase housing prices, particularly in Midwestern metro areas such as Milwaukee, according to a <a href=\"https:\/\/www.aei.org\/research-products\/report\/determining-the-price-impact-of-harris-down-payment-assistance-proposal\/\" target=\"_blank\" rel=\"noreferrer noopener\">new study<\/a> by scholars at the American Enterprise Institute.<\/p>\n<p>\u201cScrutiny of the proposal reveals that rather than alleviating the housing burden on FTBs (first-time buyers), the down payment assistance plan will harm both FTBs and repeat buyers,\u201d states the study by Edward Pinto, Tobias Peter and Sissi Li.<\/p>\n<p>The injection of down payment assistance, a government subsidy of first-time home buyers, would cause home prices in metro areas to increase by an additional 4.1% on average nationwide.<\/p>\n<p>Home buyers in the Midwest would see the sharpest increases in prices, the scholars argue, because the region is already experiencing a \u201csellers\u2019 market,\u201d where a supply imbalance puts upward pressure on prices.<\/p>\n<figure data-wp-interactive=\"core\/image\" class=\"wp-block-image size-full wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"999\" height=\"580\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-on-async--load=\"callbacks.setButtonStyles\" data-wp-on-async-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/e74sq7k37a8.exactdn.com\/wp-content\/uploads\/2024\/10\/average-home-price-increase-aei.png?strip=all&amp;lossy=1&amp;ssl=1\" alt=\"\" class=\"wp-image-53671\" \/><button class=\"lightbox-trigger\" type=\"button\" aria-label=\"Enlarge image\" data-wp-init=\"callbacks.initTriggerButton\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-style--right=\"context.imageButtonRight\" data-wp-style--top=\"context.imageButtonTop\"><\/p>\n<p>\t\t<\/button><figcaption class=\"wp-element-caption\">Image source: <a href=\"https:\/\/www.aei.org\/research-products\/report\/determining-the-price-impact-of-harris-down-payment-assistance-proposal\/\" target=\"_blank\" rel=\"noreferrer noopener\">AEI<\/a><\/figcaption><\/figure>\n<p>The AEI report confirms that Milwaukee would be among the hardest hit by further price increases due to the Harris proposal. Nearly 80% of home sales would be affected, and price increases would be 5.1%.<\/p>\n<p>As a Badger Institute <a href=\"https:\/\/www.badgerinstitute.org\/numbers\/increase-in-wisconsin-house-prices-over-time\/\" target=\"_blank\" rel=\"noreferrer noopener\">report<\/a> from this summer demonstrated, Wisconsin already has experienced some of the fastest growth in housing prices in the country, outpacing other Midwestern neighbors.<\/p>\n<figure data-wp-interactive=\"core\/image\" class=\"wp-block-image size-large wp-lightbox-container\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"739\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-on-async--load=\"callbacks.setButtonStyles\" data-wp-on-async-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/e74sq7k37a8.exactdn.com\/wp-content\/uploads\/2024\/06\/wisconsin-hpi-240610-1024x739.jpg?strip=all&amp;lossy=1&amp;ssl=1\" alt=\"Increase in Wisconsin house prices over time\" class=\"wp-image-51966\" \/><button class=\"lightbox-trigger\" type=\"button\" aria-label=\"Enlarge image: Increase in Wisconsin house prices over time\" data-wp-init=\"callbacks.initTriggerButton\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-style--right=\"context.imageButtonRight\" data-wp-style--top=\"context.imageButtonTop\"><\/p>\n<p>\t\t<\/button><\/figure>\n<p>Harris <a href=\"https:\/\/www.whitehouse.gov\/briefing-room\/speeches-remarks\/2024\/08\/16\/remarks-by-vice-president-harris-at-a-campaign-event-in-raleigh-nc\/\" target=\"_blank\" rel=\"noreferrer noopener\">pitched<\/a> the plan as a solution to help families keep up with the rising prices of housing, but the analysis reveals that injecting more funds into the market will only put further upward pressure on prices.<\/p>\n<p>Indeed, while the Harris plan would hand out $100 billion to qualified households looking to purchase a home, the subsidies would cause a total of $177 billion in price increases for all first-time buyers.<\/p>\n<p>\u201cThis is yet another example of seemingly well-intended policies resulting in massive unintended consequences,\u201d Pinto, Peter and Li argue. \u201cIn a housing market with historically low inventory, demand-side policies end up increasing home prices for a wide swath of buyers, not just the intended beneficiaries.\u201d<\/p>\n<p>The report argues that prices will increase due to several factors. For one, home buyers, including those already intending to buy a home, would have additional purchasing power. The program also would encourage some households that would have otherwise continue renting to change plans and pursue buying a home, adding additional demand.<\/p>\n<p>For regions such as the Midwest where houses already are in short supply, home prices would increase as assistance recipients bid against other buyers and each other. The authors estimate that about 3.7 million of the 4 million total recipients will face higher prices directly because of competition with other recipients.<\/p>\n<p>About 7 million non-recipients will also face higher prices as a result, for a total of 10.8 million affected borrowers.<\/p>\n<p>The report estimates that areas affected by the Harris program will see an average additional increase of 4.1% in home prices. That equates to an increase of $16,400 on a median home. In other words, about two-thirds of the subsidy will go to sellers in the form of higher prices, on average. For Midwest metro areas such as Milwaukee, the ratio could be even higher.<\/p>\n<p>When that increase of $16,400 is multiplied across all affected borrowers, it adds up to an estimated $177 billion in higher housing prices for first-time buyers. The authors also project that higher prices will ripple through the entire housing market, estimating the total inflationary impact to be $1 trillion.<\/p>\n<p><em>Wyatt Eichholz is the Badger Institute\u2019s Policy and Legislative Associate. 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} }]);                if (event &amp;&amp; event.defaultPrevented) {                return;         }        const gformWrapperDiv = document.getElementById( &#8220;gform_wrapper_21&#8221; );        if ( gformWrapperDiv ) {            const visibilitySpan = document.createElement( &#8220;span&#8221; );            visibilitySpan.id = &#8220;gform_visibility_test_21&#8221;;            gformWrapperDiv.insertAdjacentElement( &#8220;afterend&#8221;, visibilitySpan );        }        const visibilityTestDiv = document.getElementById( &#8220;gform_visibility_test_21&#8221; );        let postRenderFired = false;                function triggerPostRender() {            if ( postRenderFired ) {                return;            }            postRenderFired = true;            jQuery( document ).trigger( &#8216;gform_post_render&#8217;, [21, current_page] );            gform.utils.trigger( { event: &#8216;gform\/postRender&#8217;, native: false, data: { formId: 21, currentPage: current_page } } );            if ( visibilityTestDiv ) {                visibilityTestDiv.parentNode.removeChild( visibilityTestDiv );            }        }        function debounce( func, wait, immediate ) {            var timeout;            return function() {                var context = this, args = arguments;                var later = function() {                    timeout = null;                    if ( !immediate ) func.apply( context, args );                };                var callNow = immediate &amp;&amp; !timeout;                clearTimeout( timeout );                timeout = setTimeout( later, wait );                if ( callNow ) func.apply( context, args );            };        }        const debouncedTriggerPostRender = debounce( function() {            triggerPostRender();        }, 200 );        if ( visibilityTestDiv &amp;&amp; visibilityTestDiv.offsetParent === null ) {            const observer = new MutationObserver( ( mutations ) =&gt; {                mutations.forEach( ( mutation ) =&gt; 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