New York First Home Initiative

Each week I receive an e-mail from the New York State Realtor Association.  I read it and keep going...Local issues are far more pressing, as are my sellers' and buyers' needs.  But the one I received today made me explore further.

Under consideration by the legislature is a bill to help first time homebuyers.  It's not a grant, as much as a dedicated savings account.  The small blurb says "The program would allow individuals to save up to $5,000 ($10,000 for couples) per year in a designated savings account to be used solely for costs associated with the purchase of a first home."

I am not sure I quite understand....is this before taxes?  I was more interested in the figures they used to promote this.  New York State had the lowest rate of home ownership in the country in 2014.  The lowest! The national average was about 64% while NYS came in at 52.9%.  That is low!  The disparity was even greater prior to the recession in 2008.

The reasons given were two-fold:  property taxes are among the highest in the nation (as if we didn't know!) and closing costs consistently are the highest of all the states (nyfirsthome.com).  So when buying a new home, not only do buyers have to come up with as much as a year in (high) taxes to escrow, but they also pay higher closing costs.  Cash at closing, taxes, costs associated with buying (appraisal, attorney fees, etc.) can easily be more than $10,000.  Even when the houses are under $100,000 in price.

In some ways this keeps the prices of houses artificially low.  I hear from people who relocate here that they can't believe the prices compared with where they were.  Our education systems are excellent, for the most part, our roads decent, communities accessible, and commutes (another blog to come) reasonable.  Once in a house the low costs are reflected in the monthly mortgage bill....it's the getting to the monthly mortgage bill that causes the problems.

I'll keep an eye on this program.  You are more than welcome to check it out:  http://nyfirsthome.com.  I would love to hear what you think!