Harris Down Payment Assistance: Good or Bad for Homebuyers?

Democratic presidential nominee, Vice President Kamala Harris pauses while speaking during a campaign rally at the Rawhide Event Center on October 10, 2024 in Chandler, Arizona.. — (Image credit: Getty Images)

Democratic presidential candidate Kamala Harris recently proposed a plan to offer first-time homebuyers $25,000 in down payment assistance. But could this help or hurt the housing market? This plan is part of Harris’s broader economic policy designed to lower costs for middle-class families and create an “opportunity economy.”

“We should be making everything to make it more affordable to buy a home, not less,” Harris said during a recent speech in Raleigh, North Carolina.

The Harris-Walz administration plans to provide up to $25,000 in down-payment assistance to address housing affordability. The assistance would be available for families who have paid their rent on time for two years and are buying their first home. “More generous support” would be available for first-generation homeowners.

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This plan expands and simplifies a proposal from the Biden-Harris administration that offered $25,000 in down payment assistance only for 400,000 first-generation homebuyers. Under Harris’s plan, all eligible first-time homebuyers will receive an average of $25,000, “allowing over 4 million first-time buyers over 4 years to get significant down payment assistance.”

The Harris-Walz Administration has also called for the construction of 3 million new housing units to end the housing supply shortage, as well as numerous housing tax credits.

Here’s what the experts say about whether this would benefit the housing market. Many believe that while it could help first-time buyers, it could also inflate housing prices.

Is Harris’s proposed down payment assistance good or bad for homebuyers?

“Giving first-time homebuyers $25,000 to put down would put further pressure upon historically low inventory levels, resulting in increased appreciation of starter homes where affordability matters the most. I believe Vice President Harris' initiative would greatly benefit sellers, real estate agents and investors at a direct detriment to first-time home buyers. We need more inventory for families, not more families competing for the same houses.”

— Ryan Dossey, co-founder at SoldFast

“It will increase access to homeownership, which is a good thing. With that said, it will also create an increased demand for homes, which could contribute to further price inflation, especially in markets where current inventory isn't able to meet the current demand.”

— Jeff Klotz CEO at The Klotz Group of Companies

"I believe the next question (if it is passed) is not if it will impact the economy but if sellers will work with homebuyers that use such downpayment assistance. Historically, the answer is some will, but a lot more will not, especially if the downpayment program is structured like existing programs, which may require extra time for home-buying classes, inspections and additional financial verifications.

Thus, before forecasting the impact on the economy, we really need to hear how this down payment program will be administered in a more seller-friendly way and circumvent the hurdles that other programs have documented in detail. Otherwise, the economic impact will likely be inconsequential if it becomes more a token of goodwill rather than a substantive and widely adopted program."

— Dr. Lee Davenport, strategic Coaching Advisor at PropertyCashin

"Down payment assistance is essential for increasing homeownership, which has historically been a key driver of wealth creation. If managed carefully, such a program can avoid inflating home prices. However, without a corresponding increase in housing inventory, increased purchasing power could drive prices up further, worsening affordability.

Ultimately, the success of this plan hinges on resolving the ongoing inventory shortage. The Harris-Walz administration has addressed this issue in their proposal, but it's crucial to see real progress in terms of concrete targets for increasing supply, particularly in segments accessible to first-time buyers."

— Luca Dahlhausen, Founder & CEO of Realfinity.io

"This assistance may make homebuying easier for first-time buyers, which in turn could increase demand for more affordable homes. This is probably most noted in entry-level home markets or even those in which demand already surpasses supply.

With greater demand and no immediate supply growth to match, prices may be driven upwards, especially in competitive housing markets. Sellers also could increase the prices since buyers have more money in their pockets."

— Daniel Cabrera, owner and founder of Sell My House Fast SA TX

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.