Assistance for first-time homebuyers
According to the National Association of Realtors, assistance could be on the way for homebuyers struggling to produce enough money for a down payment on their first home. As a candidate, President Joe Biden proposed a first-time homebuyer tax credit, which could significantly help. For starters, the credit could cover all or a considerable share of a buyer’s down payment. With home prices rising ever higher here in Santa Fe, any down payment assistance is a boon to a family looking to buy a home.
For years, aspiring minority and millennial homebuyers have struggled to save enough for a down payment. Sky-high student loan payments, along with ever-increasing childcare costs and other urgent needs, have made the goal of buying that first home elusive for too many Americans. In addition, financial hardships brought on by the COVID-19 pandemic have hit minorities and lower-wage workers particularly hard. These demographics, especially, would immediately benefit from Biden’s proposal.
Down payment assistance – in this case, up to $15,000 – could make all the difference in helping hopeful buyers get a foot in the door. And making the credit advanceable would mean buyers could access the funds upon closing rather than having to wait until the following year after their tax returns are filed and the refund arrives.
That said, policies to increase the supply of homes are equally important. As we look at the current housing market and mortgage data, we see an upward trend. For instance, existing-homes sales totaled 5.64 million units in 2020, their highest level since 2006, before the Great Recession, with mortgage rates at all-time lows. But while demand is high, supply registers at a 50-year low. This means home prices will continue to soar unless more residential units can be built. Local housing policies and incentives that increase supply are necessary for keeping home prices affordable.
To grow housing, Santa Fe’s land use department has recommended ways to increase efficiencies such as requiring an administrative development plan at five units in a construction project or permitting affordable housing and residential projects up to 30,000 square feet to skip the preliminary subdivision step. Additionally, staff has recommended a number of ways to incentivize projects that provide sustainable building practices, long-term housing affordability and highly desirable walkability, like permitting increased density for developments that achieve LEED or have a Walk Score of 50 or greater. Measured on a scale of zero to 100, a Walk Score indicates the walkability or pedestrian-friendliness of any given address.
The Santa Fe Association of Realtors will continue to advocate for the building of more affordable housing, in addition to increasing the housing supply, because it will provide a boon for our local economy. SFAR stands ready to encourage policies and ideas that level the playing field and help all our neighbors achieve the American dream of home ownership.
Paco Arguello is chief executive of the Santa Fe Association of Realtors. Contact him at 982-8385 or firstname.lastname@example.org.