First time homebuyer? Uncle Sam sez DON'T BUY YET!!!

[Robroy]

First the economic stimulous. Now the housing stimulous.

Check out this federal housing bill:
http://blog.mlive.com/getting_in_your_b ... hback.html

And lookee here from the article: "...it also includes a $7,500 tax credit for first-time home buyers..."

This, in effect, means the fed will GIVE YOU $7,500 to buy a house, once the bill is passed. Seems like a good deal, assuming home prices don't continue to drop.

I wouldn't take the bait in Seattle or Miami, but in Podunk, Kentucky, (or SD, or Kansas, et-al) where a McMansion on a few acres goes for less than $200,000, this is incredible! And they don't even really have a housing bubble to speak of.

This is really quite incredible and seems, on the surface at least, to be pretty darned desparate.

[Markor]

Of course only a small percentage of that $7500 will be realized, since it just reduces the income on which taxes are paid.

Still, it's a giveaway, effectively a tax cut. The answer to everything now is borrow more money from future generations. It'll be paid back in spades via inflation, by most of us unfortunately.

[Robroy]

[Markor]

You're right. Looks like house prices are going up by $7500.

[Robroy]

[jon]

At least they aren't paying builders not to build houses. Yet.

[Robroy]

[laxtosnoco]

Some sources are reporting that the tax 'credit' is really a loan. For example, according to CNN the $7500 credit would have to be paid back in equal installments over 15 years.

I imagine buyers would still use the credit, but the effect would be less if it's not truly a grant/gift.

[Robroy]

[garth]

[Robroy]

[Alan]

Maybe it is a reverse tax credit. You get the money when you buy the house but you have to pay it back when you file your Federal return.

[Robroy]