The along with some economists and at least one lawmaker, argues that the U.S. government’s soon-to-expire tax credit of up to $8,000 for first-time home buyers should be renewed as it did cause buyers to stimulate the economy. The National Association of Realtors says the credit resulted in 350,000 home sales this year that otherwise would not have closed.
Let’s hope that they realize we need this extended to keep up the momentum.
Elsie & Julie
“Don’t Let The Sun Set On Your Dreams”
Team Tropic Hernando/Tropic Shores
Extending the Tax Credit is bad idea. As latest analysis has shown most buyers were going to buy anyways, only a minority has done it due to the credit. What this Tax Credit is doing, is to re-inflate the bubble because Sellers and Realtors are adjusting prices up as a reaction to buyers who have more money available.
Let the free market do its job of cleaning this mess! Falling prices is not the problem, it is the solution. What we are going through is a correction (btw, that is good). We just can’t get us out of this mess by trying to re-inflate housing. At this stage, stimulating is equivalent to re-inflating the housing bubble.
Eventually this program is going to have to end, and when it happens, we are going to have a crash, a hangover (just as for cash-4-clunkers). The bigger the Tax Credit, and the Longer, the harder we will fall again. This type of measures don’t create momentum, they just delay and send problems to the future.
How can we be speaking of a “recovery” with all of this Government intervention? The government should stop trying to “help” with moratoriums and tax credits, eventually they will have to go away and the crash will come back with revenge (not to mention the extra debt acquired).