By:Dennis Norman
It appears that later today the US House of Representatives and the US Senate will both give approval to an Economic Stimulus Package that,in my opinion,has the housing market coming up short. It is also expected that President Obama will sign the bill into law no later than Monday.
I know many investors out there were hoping for a stimulus package that would provide some serious incentives to buyers to try to “jump-start”this tortous market we are in. Unfortunately I don’t think the economic stimulus package that is expected to be approved today is not going to do this.
There are many positive things in the package but my focus here is just housing. Out of the 19 pages it took to print the “summary”of the bill on,only one paragraph applied to housing. Here are the highlights of the bill with regard to housing:
- The bill would eliminate the repayment obligation that was tied to the $7,500 “credit”(really an interest-free loan) that Congress passed last year for first-time buyers only. Now,as long as the buyer does not sell the home within 3 years of purchase this money does not have to be repaid,thereby making it a true credit. The maximum value is being increased from $7,500 to $8,000 as well.
- The credit of up to $8,000 would be available on homes purchased before December 1,2009.
- The credit unfortunately still only applies to first-time buyers.
For a while however it appeared the housing market may have a shot at getting some REAL incentives,which it desperately needs. Last month I did a post about “Fix Housing First” which is a coalitionthat was pushing Congress for a real housing stimulus package that included a tax credit of 10% of the home price (with a cap of $10,000 –$22,000 depending on geographic area) for ALL buyers,not just first-time ones. In addition their proposal including allowing the credit to be used for down-payment by the buyer. Low interest rate mortgages were the final part of the package that would have helped give the real estate market a big boost.
It looked like headway was being made whenSenator Johnny Isakson (R-Ga) introduced legislation that included the suggestions from the Fix Housing First coalition. Unfortunately housing lost out as the negotiating and horse-trading that is a part of bill passage in Congress took place.
I’m sure this is not the last we will hear about this. Hopefully future news will be positive.
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