Harris’ proposed subsidy may cover 10% down payment in five key swing state metros

Vice President Kamala Harris' proposal to provide $25,000 in down-payment assistance to first-time homebuyers has drawn polarized reactions, with some praising the plan as a way to level the playing field and others arguing that it will drive home prices higher.

But just how much house will a $25,000 down payment buy? The answer, according to a new analysis from the Realtor.com economic research team, depends greatly on what part of the country you’re in.

Assuming a buyer relied only on the proposed federal credit, without bringing any of their own cash to the table, a $25,000 subsidy would cover a 10% down payment on the median-priced home in 16 U.S. metro areas, the study found.

Five of those metros are in swing states that will be key for Harris as she faces Donald Trump in November: Scranton, PA; Pittsburgh, PA; Erie, PA; Lansing, MI; and Flint, MI. Additionally, the Youngstown, OH metro area includes parts of Pennsylvania and also makes the list.

Of the 11 other metros where $25,000 covers a 10% down payment, eight are in states expected to vote for Trump in November and three are within states solidly supporting Harris.

The typical homebuyer will likely bring some of their own funds to a deal. Renters have a median net worth of about $10,000 according to the Federal Reserve and many would be able to use some savings to supplement a federal down-payment credit.

First-time buyers are more likely to look at homes on the lower end of the price spectrum including smaller homes priced below the area median price. Still, the new study offers insight into where the proposed homebuyer credit would have its biggest impact—and where it might be most attractive to voters.

"Though the proposed down-payment assistance could cover an entire down payment in many of the country's most affordable markets," says Hannah Jones senior economic research analyst at Realtor.com. "Most prospective buyers have some savings for a down payment already and this boost could be just what they need to achieve homeownership sooner even in a higher-priced market."

"Opting for a large down payment can help a buyer reduce the size of their home loan thereby minimizing interest payments or can be used to purchase a slightly higher-priced home without increasing their loan size," she adds. "Either way an influx of cash could help first-time buyers compete more effectively in today's high-priced market despite having no existing home equity to leverage."

Notably areas where a $25,000 down payment credit would go furthest for first-time buyers are concentrated in the Midwest. The three Rust Belt swing states of Pennsylvania Michigan and Wisconsin are considered crucial for Harris' path to victory.

Many details of Harris' plan remain unclear including who would qualify for subsidies and how funds would be paid out.

In an interview Harris suggested assistance would come as tax credits. The Harris campaign has also stated that funds would be available for first-time homebuyers who have paid rent on time for at least two years.

Presumably credits would only be available to homebuyers who qualify for mortgages. Buyers still need to ensure they can afford monthly mortgage payments.