Wednesday, October 14, 2009
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The fever of recession may have broken, but allowing nature to take its course is bad medicine for housing and the nation's economy. Even if the economy has begun to grow, the outlook for jobs is alarming, with unemployment approaching 10 percent. In the housing sector, which typically leads the way to recovery, foreclosures remain a threat to stabilization in housing prices, builders have been cut off from the credit they need to finish viable projects and begin new ones, and the housing finance system is in disarray.
Extending the current $8,000 tax credit for first-time home buyers for an additional year and expanding it to all buyers of a primary home, within eligible income limits, would increase new and existing home sales by 383,000 and housing starts by 82,000 across the nation. It would create more than 347,000 jobs for the U.S., generating more than $16 billion in wage income and $12 billion in business income nationally, yielding $8 billion in federal taxes and $3 billion for state and local governments. The cost would be roughly $30 billion.
The credit that expires on Nov. 30 has, according to the IRS, helped 1.4 million taxpayers buy homes. Still reeling from the most devastating downturn since World War II, housing is only beginning to gain the momentum needed to move to higher ground. The federal government's role throughout this crisis has been indispensable. Allowing housing to suffer a relapse is the last thing the economy can afford.
Newton County Home Builders Association