2024 Presidential Election | Harris proposes $25,000 assistance for first-time home buyers amid major upheaval in housing market

RALEIGH, NC (WTVD) – There are some big changes for homebuyers this weekend – and there could be more to come.

On Friday, likely Democratic presidential nominee Kamala Harris pledged to provide $25,000 in assistance to eligible first-time homebuyers if elected in November.

The announcement came on the same weekend that major changes took place in the housing market and in the real estate company’s commission structure.

Under these changes – which were the result of a settlement reached by the National Association of Realtors following an antitrust lawsuit – prospective home buyers must sign a legal agreement with their agents up front that outlines how and how much those agents will be paid. Whereas in the past, the typical five to six percent commission paid at the closing of a home purchase came from the seller side and was negotiated and split between the buyer’s and seller’s agents, the process of paying those two sides has been split.

Real estate agents from the Triangle like Mike Montpetit with Town & Country Realty said it was too early to assess what impact the shift would have on home prices, but the goal of the changes was to increase transparency and competition.

“I think this is actually a good thing because now consumers see complete transparency. No matter who they work for – whoever works for them, the buyer will know how much they are paying that person,” Montpetit said.

He added that the changes would make it more important for buyers and sellers to find the right agent to work with, and he believes that trained, successful agents would not be greatly impacted in the long term.

“There are going to be some buyers who are going to have a tough time if they don’t get good representation. In the past, any agent could help them with that. What’s really going to happen is that the market is going to stabilize and find its place, and the free market is going to work just fine,” Montpetit said.

As for Harris’s home buying proposal, economists say it is crucial that the aid, if elected, be accompanied by the construction of large homes. Otherwise, the plan risks further exacerbating already high inflation.

“Giving them some financial help is good, but at the same time you have to recognize that if you don’t increase supply, the financial help will just be eaten up by higher housing prices,” says Mike Walden, Reynolds Distinguished Professor at North Carolina State University.

While Harris’ plan includes incentives for builders to build new homes, it’s unclear how that would work – especially in cities with strict building codes. Walden says Raleigh’s building codes are favorable for building new homes.

Political experts are now convinced that it is no coincidence that the plan was presented in the Triangle, where real estate prices have risen sharply in recent years.

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“This is a good policy for the election this year because inflation is a key issue. And this is their way of dealing with one of the main problems of inflation, which is rising house prices,” said political scientist David McLennan.

McLennan expects the Harris campaign to continue to focus on inflation and homeownership during the North Carolina election campaign.

“It’s about convincing middle- and working-class voters to accept their economic package,” he said.