A Revival of the Homebuyer Tax Credits?
This weekend, Shaun Donovan, the secretary of Housing and Urban Development, said that “it was too soon to say” whether the Obama administration might revive its $8,000 tax credit for first-time home buyers or $6,500 credit for other home buyers. Speaking on CNN, Florida Gov. (and independent Senate candidate) Charlie Crist recommended re-upping the programs, which he said would help “enormously.”
Last month, housing slumped to its worst state in decades. The National Association of Realtors said home sales declined 27 percent to a 15-year low. And the Commerce Department said sales of new single-family houses dropped 12.4 percent between June and July, to the lowest level in the 47 years the department has kept the data. Foreclosures remain high. And many economists predict a second national decline in home prices.
Reviving the Obama tax credits might halt or slow that second leg down, and it might be worth doing for that reason. But some data indicates the credits merely convinced people who were going to buy houses anyway to buy sooner, rather than bringing in new juice. And mortgage reduction seems a better way to keep families in homes and stabilize housing.