Bill Overview
Title: American Dream Down Payment Act of 2022
Description: This bill establishes qualified down payment savings programs that allow taxpayers to establish tax-free accounts to save for down payments, including closing costs, on a principal residence. The Department of the Treasury, in coordination with the Securities and Exchange Commission, must report on matters relating to such accounts, including the number of states that have established down payment savings programs and information about beneficiaries of such programs.
Sponsors: Sen. Warnock, Raphael G. [D-GA]
Target Audience
Population: Prospective homebuyers
Estimated Size: 50000000
- The bill pertains to individuals looking to purchase a principal residence, indicating a target population of prospective homebuyers.
- It specifically addresses the establishment of tax-free accounts for down payments, impacting individuals who are saving for a home purchase.
- In the United States, a significant portion of the population are either first-time homebuyers or looking to move residences and would thus benefit from programs that reduce the financial barriers to home ownership.
- As of recent data, there are millions of potential first-time homebuyers in the U.S., given that millennials are reaching prime home-buying age.
Reasoning
- The American Dream Down Payment Act of 2022 provides tax-free savings accounts for future homebuyers, thus specifically targeting prospective homebuyers, especially those currently saving for their first home or looking to move into a new residence.
- Considering the relevant financial aspects and the budget allocation, the policy might predominantly benefit middle-income individuals who have surplus income they can devote to these accounts.
- Important characteristics to capture include diversity in age, occupation, and socio-economic status as these will affect their perspectives on the benefits of the policy.
- Individuals from different locations might show different levels of interest and ability to save due to variance in real estate market conditions.
Simulated Interviews
Software Developer (Austin, TX)
Age: 29 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- The policy sounds beneficial as any savings on taxes and increased ability to save for a home is helpful.
- Austin real estate is expensive, so every bit counts.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 8 |
Teacher (Cleveland, OH)
Age: 34 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 15/20
Statement of Opinion:
- I think it's a good step toward making homeownership more accessible, especially for teachers like me.
- With school loans and childcare expenses, saving is tough.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Real Estate Agent (Miami, FL)
Age: 42 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- I'm supportive of measures to help people buy homes, but this policy doesn't impact me directly.
- My clients could benefit though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 7 | 7 |
Accountant (Salt Lake City, UT)
Age: 55 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- This doesn't apply to me now, but if I were younger, it would be appealing.
- I see the value in encouraging homeownership.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 8 |
Data Analyst (San Francisco, CA)
Age: 30 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- San Francisco is expensive, so this policy could really help.
- Anything that boosts my savings capability is welcomed.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Barista (Chicago, IL)
Age: 26 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 18/20
Statement of Opinion:
- Great for future planning. I'd start saving if I can secure a better job.
- Currently, home buying seems far off.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Graphic Designer (Los Angeles, CA)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- It's a smart policy for people like us looking to get out of renting.
- LA prices are high, and every bit of savings helps.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Nurse (Dallas, TX)
Age: 60 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- I'm happy others could get help, but this doesn't affect me.
- Support for younger folks buying homes is always positive.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
College Student (Denver, CO)
Age: 22 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 16/20
Statement of Opinion:
- Not ready for home buying yet, but this gives me something to think about.
- I'll need a higher salary to save enough.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Small Business Owner (New York City, NY)
Age: 48 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 8.0 years
Commonness: 11/20
Statement of Opinion:
- NYC requires big savings, so this policy is a good option.
- I need financial security with my business first.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $400000000 (Low: $300000000, High: $500000000)
Year 2: $420000000 (Low: $320000000, High: $520000000)
Year 3: $440000000 (Low: $330000000, High: $550000000)
Year 5: $470000000 (Low: $350000000, High: $600000000)
Year 10: $500000000 (Low: $370000000, High: $650000000)
Year 100: $550000000 (Low: $400000000, High: $700000000)
Key Considerations
- The incentivization of home savings is intended to increase homeownership, which can lead to broader economic stability.
- The tax-favored status of these accounts can significantly influence both the federal budget and individual savings behavior.
- The success of the bill heavily depends on the adoption rate by potential homebuyers and the effectiveness of state-level program implementations.