Frustrated home buyers are getting more frustrated with the rising prices and lack of options in the housing market. That’s according to Fannie Mae’s latest Home Purchase Sentiment Index reveals that just 35% of people believe now is a good time to buy a home, down from 47% just a month ago. Moreover, the percentage of people who think it’s a bad time to be in the market for a home surged to 56%, up from 48% last month.
Dough Duncan, senior vice president and chief economist at Fannie Mae told HousingWire that consumers are acutely aware of the higher prices and reduced supply of homes for sale. Those were “the two reasons cited most frequently” for home buyer’s sentiments, he said.
California’s Solution
Since Roman times the idea of buying votes with bread and circuses has been a staple of politicians. Vote for me, and I’ll make sure that you will receive farm subsidies and price supports. Vote for me, and I’ll make sure you’ll have free healthcare; I’ll pay off your student loans. And while we are at it, education is essential. So I’ll give you a free college education. Vote for me, and I’ll even pay you not to work. Now, this:
California Proposes Subsidy to Cover Almost Half the Cost of First-Time Buyer’s Homes
According to Realty Biz News, “Lawmakers in California have come up with a dramatic new proposal that, if it comes into being, would offer hope to first-time buyers that are struggling to find a home to buy in the state.
“California Senate Democrats have included a new program in a budget proposal unveiled last week that would massively subsidize the cost of buying a first home.”
“The California Dream for All program is a part of the Democrats’ larger Build Back Boldly program that was first outlined in April. Last week, lawmakers provided more details, saying the plan would subsidize up to 45% of the price of a home for a first-time buyer in the state, effectively slashing the price almost in half.”
Frustrated Home Buyers
The plan is a bit complex. First, the California Dream Fund would receive a one-time infusion of state and federal funds. Then, the state would sell shares of the fund to private investors who would benefit from earning tax-free returns on the appreciating value of the homes that money funds. So those investors, in effect, become silent partners of homebuyers who take advantage of the subsidy. The homeowners would be responsible for all of the maintenance costs, property taxes, and insurance premiums, and they would have the option to buy out the investors’ share in their home at a later date.
Housing Shortage
There is a housing shortage everywhere in the United States, and that shortage is causing prices to rise. A March survey found that nine out of 10 respondents considered housing affordability to be a serious problem.
How would the plan work? An example cited is of a home priced at $400,000. The idea is that the first-time buyer would find a house for $400,00. The buyer would agree to buy the house for $220,000 with the fund covering $180,000
Critics argue the seller would merely raise the selling price. Should that happen, this new program would produce no improvement in housing affordability and potentially make the problem worse for those who don’t end up qualifying for subsidies.
Is this the proper function of government? Does it protect our freedoms and provide safe neighborhoods? In our heavily indebted cities, states and government, can we afford another government giveaway?
Paige Panzarello, the “Cashflow Chick,” Founder of The Tryllion Group
Investor/Entrepreneur having done $150 Million+ in real estate transactions; Specializing in Non-Performing Notes. She has been a regularly featured guest on “The Cashflow Guys” podcast, and you can also find her on many other Real Estate and Entrepreneurial podcasts and in the Wall Street Journal as well. She also speaks at various Real Estate Investing clubs and conferences across the country. Paige teaches the “Building Wealth with Notes” Workshop that drills down into the details of how to successfully buy Non-Performing Notes, create passive income, and mitigate risk. www.CashflowChick.com/training
Surviving the crash of 2007, Paige knows how “life happens” every day. Her passion is to help people build wealth, secure their financial future, enjoy life, and be ready-not broken! Whether it is improving communities one house at a time, assisting borrowers in staying in their homes, or working with other investors to learn a new way to earn higher investment dollars for their retirement years potentially, Paige dedicates herself and her business to helping people improve their lives in every way. For more information got to www.CashflowChick.com
