Obama Signs Stimulus Bill

It’s official – President Barack Obama signed the stimulus package into law on Tuesday. Being in office less than one month, the economic stimulus package was a top priority and he worked diligently to ensure a quick process. So, what types of effect should we see on the housing industry from this stimulus legislation? $50 billion of the $787 billion stimulus plan is devoted to foreclosure prevention. Over the past few years foreclosure rates have skyrocketed out of control, and the government wants to do everything they can to get a handle on this and keep Americans in their homes.

Home shoppers that purchase energy-efficient homes will benefit from a tax break. This incentive also applies to homeowners that renovate their homes with energy-efficient features.

And the first time home buyer tax credit has been slightly enhanced. It is no longer an interest-free loan, which means that you do not have to pay it back. In addition, they raised the amount by $500, making it an $8,000 home buyer tax credit.

Hopefully these three factors will be enough to stimulate a turnaround. You can read more about the new legislation in this article from the Atlanta Journal-Constitution.

If you’ll remember correctly, it’s only been about six months since the Housing and Economic Recovery Act of 2008. This piece of legislation fell short of providing the economy and housing market with the boost that it needs. Do you think the new economic stimulus legislation will have its desired effect? What aspects make this more likely to be effective than the Housing and Economic Recovery Act of 2008?

UPDATE: As of Nov. 5, 2009 the Tax Credit has been extended through April 30, 2010. Read more about the Tax Credit Extension here.