Housing Giants - August 25, 2008 - (Page 7) vIEWPOINT By Bill Lurz, Senior Editor This is a good Thing There are stipulations, but the tax credit portion of the recent housing act will help stabilize our market. naHB economists Believe more than 2 million home buyers will use the $7,500 tax credit included in the Housing and Economic Recovery Act of 2008, recently signed into law by President Bush. “That’s our projection for people claiming the credit on tax returns in either 2008 or 2009,” says NAHB economist Rob Deitz. “We’re just looking at our forecast for home sales and assuming 40 percent of those sales will be to first-time buyers. And that’s not taking into account sales induced by the tax credit — those that would not have occurred without it.” Now remember, most of those 2 million home sales will be in the existing home market, but the law will still have a big impact on home builders by stabilizing prices and breaking the log-jam that’s caused inventories of unsold homes to spiral up all across the country. “The key thing this will do is get inventory levels down,” Deitz says. “While getting a sale in the existing home market is not ‘first best’ for our industry, it’s one more house off the inventory rolls. And then there’s the multiplier effect that Video ediTorial Bill describes the ironies behind the tax credit and how it will help builders. www.Housinggiants.com 8.25.08.Housing giants http://banking.senate.gov/public/_files/HousingandEconomicRecoveryActSummary.pdf http://banking.senate.gov/public/_files/HousingandEconomicRecoveryActSummary.pdf http://www.housinggiants.com
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