Town Square

Post a New Topic

California legislators want to help you buy a house with down payment, 'shared equity'

Original post made on Jun 16, 2022

California legislators propose a $1-billion-a-year down payment program for first-time buyers, given the high cost of housing and rising mortgage interest rates, in exchange for a partial stake.

Read the full story here Web Link posted Thursday, June 16, 2022, 12:09 PM

Comments (1)

Posted by JustAWorkingStiff
a resident of Another Mountain View Neighborhood
on Jun 16, 2022 at 3:59 pm

JustAWorkingStiff is a registered user.

This initiative may not age very well.
Rising interest rates/mortgage rates will be negatively impacting housing prices
Using Government money (e.g tax payer money) to help a few people buy houses is likely not
a good idea. (Although I am sure it makes a lot of people *feel* good.) Plus in a low mortgage rate environment is would only ad to demand, driving up prices.
Missing from the article is how the Federal Reserve Bank was buying $50 billion in mortgage backed securities every month, and suppressing mortgage rates artificially. This allows people to bid up housing prices (geez, with rates this low, let's bid $50K higher). This is ending, and it will be instructive to see the effect on housing prices (likely negative).
Net/Net: It is interesting to watch as our politicians twist themselves into a pretzels to try to do something good. But ignore economic realities. And ignore the elephant (s) in the room
Those elephants include 1) Artificially low mortgage rates which create too much demand and drives prices higher (this is declining as per events on Wed June 14 as per Federal Reserve Chairman's Jerome Powell and other supporting event too numerous to enumerate) 2) Too much demand (e.g. we live in a high demand area with high paid tech workers)- many of whom are being asked to come back into the office 3) The land itself is so expensive that it often requires the scraping of old building to put more modern up to date apartments that can bring in more revenue and margin to support the price paid for land 4) The additional costs of regulations, fees, paperwork - this doesn't get enough recognition. There is a cost to maintaining compliance. But the attitude is often "it is just a little bit". A little bit adds up.


Don't miss out on the discussion!
Sign up to be notified of new comments on this topic.

Email:


Post a comment

In order to encourage respectful and thoughtful discussion, commenting on stories is available to those who are registered users. If you are already a registered user and the commenting form is not below, you need to log in. If you are not registered, you can do so here.

Please make sure your comments are truthful, on-topic and do not disrespect another poster. Don't be snarky or belittling. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

See our announcement about requiring registration for commenting.

Stay informed.

Get the day's top headlines from Mountain View Online sent to your inbox in the Express newsletter.

E-Bikes on Open Space Trails: Yes or No?
By Sherry Listgarten | 16 comments | 4,169 views

Comcast, what are you doing to us?
By Diana Diamond | 16 comments | 2,757 views

12 can't-miss items at Eataly Silicon Valley, according to an Italian food expert
By The Peninsula Foodist | 0 comments | 2,515 views

Gifts and Belongings
By Chandrama Anderson | 2 comments | 1,773 views

Idaho Hot Springs and Yellowstone – Travelin’ Solo
By Laura Stec | 0 comments | 690 views