It’s up to the Housing Market to End the Recession
“This economic downturn began with a downturn in the housing market and a recovery in our economy has to begin with the recovery of the housing market, as well.”
Would it surprise you to know that it was President Obama who said this? Finally, Congress, politicians and even the President understand what we have been trying to tell them for the past year – that the state of the economy is dependent on the state of the housing market. Now that they are acknowledging this, we are finally getting some legal support that will, ideally, give us the boost we need to end the recession. This is a huge step in the right direction, which may explain why it’s the cover-story for the NAHB’s weekly newspaper Nation’s Building News Online.
One major factor for stimulating the market is the fact that the $8,000 home buyer tax credit can be used at the closing table when purchasing an FHA-insured home. So, the funds can be used as a downpayment or to cover closing costs, either way it should get more first-time homebuyers purchasing homes before December 1st.
The federal housing tax credit expires on December 1st, meaning we have less than five months left to take advantage of it. Contrary to what you may be thinking, the tax credit is beneficial to both first-time homebuyer and move-up buyers as well. Move-up buyers may not be able to use the tax credit, but those that are purchasing their home probably can. More first-time buyers in the market can ease your mind and give you more confidence about putting your existing house on the market in order to move-up. (Update: As of Nov. 5, 2009, the Tax Credit was extended for first-time homebuyers and expanded to include move-up buyers. Read more about the Homebuyer Tax Credit Extension here.)
The article from the NAHB newspaper gives more details about the FHA and their predictions for the rest of the year. It aslo discusses many positive factors that have already been a result of the $8,000 tax credit. Anyone that doesn’t think we are on the road to recovery should really read the article in its entirety. Remember, once the housing market turns, the economy won’t be far behind.
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Linda Rooney | Jun 10, 2009 | Reply
It would not surprise me at all that Obama said this … what he didn’t say was more surprising: That the government’s tinkering (read: social engineering) through CRA and other “programs” led to people who should have been renting until they COULD afford to buy getting not only into home ownership but into homes they had no way of affording at all. Let the banks do what they have historically done (because they’re BUSINESSPEOPLE): Use reasonable qualifying criteria upon which to lend. And now we have $8K credits to help people who – again – are in no position to buy, and we’re “helping” them. The whole thing would be laughable if it weren’t so serious.
rude dude | Jun 18, 2009 | Reply
Think about this. I used to pay $845 a month on rent and was not able save a dime of my paycheck. Since I couldn’t save any money, I was never able to purchase a home. This little down payment from the tax credit helped me purchase a house that only costs me $650 a month. Thanks to the tax credit I am a home owner and no longer wasting my money on rent. The one thing that kept me from purchasing a house before was a down payment not the fact that I couldn’t afford the monthly payments. So clearly, your comment doesn’t make since.