Court Calif. new-build buyers: Prop 37 funds up to 17% down

California voters have passed Proposition 37, a massive $25 billion bond measure that will fundamentally change the landscape for new home construction and related consumer financing. For retailers and contractors in the home space, this is a major demand driver. The state will now offer second mortgages to buyers of new-build homes, covering up to 17% of the down payment. This program effectively lowers the barrier to entry for thousands of residents who were previously priced out of the market due to high upfront costs. For operators in the home improvement and furniture sectors, this influx of new homeowners represents a massive wave of new customers. These buyers will likely have more liquidity at the time of purchase because their down payment burden was subsidized by the state. You should prepare for increased demand in 'new home' spending categories like landscaping, window treatments, and initial furnishing. Additionally, because these are new-builds, the financing ecosystem around these homes will be robust. Lenders will be looking to attach various consumer credit products to these high-value buyers. If you operate in California, now is the time to align your financing offers with new homeowners who are entering the market with state-backed equity.

Source: American Banker — Top News

← Return to the library· Submit a correction