This tax credit is being compared to the 1975 tax credit for homebuyers. However in 1975 the tax credit was for new homes only, and was intended to reduce the inventory of new homes, and help put residential construction workers back to work.
\n…
\nIn this case the tax credit is for both existing and new homes. This is more of an incentive to get people to move as opposed to putting people back to work. Whereas there were few excess units in 1975 (except excess new home inventory), there are far too many excess units today.<\/p>\n
The sponsors and supporters of this tax credit believe this will support house prices – a mistake because this will mostly just shuffle homeowners between homes, and not reduce the excess supply.
\n…
\nThe key problem for housing is prices are too high. How does this tax credit help reduce prices? Why are we trying to artificially increase the turnover rate? And why are we targeting a tax credit at higher income individuals?<\/p>\n
This tax credit seems ill-conceived, and probably should be removed from the stimulus package. No one has adequately explained how this helps “fix housing first”.<\/p><\/blockquote>\n
Your thoughts are welcomed.<\/p>\n","protected":false},"excerpt":{"rendered":"
I’m sure many real estate agents out there are throwing parties and dancing in the streets with the Senate passage of the so-called stimulus that includes a $15,000 tax credit for home buyers. The idea is that somehow this will magically rescue the housing market and (presumably) reverse the fall of home prices. Personally, I’m…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[198],"tags":[282,104],"coauthors":[],"class_list":["post-4210","post","type-post","status-publish","format-standard","hentry","category-news","tag-bailout","tag-government_meddling"],"yoast_head":"\n
Calculated Risk on the $15k Homebuyer Tax Credit \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2009\/02\/07\/calculated-risk-on-the-15k-homebuyer-tax-credit\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Calculated Risk on the $15k Homebuyer Tax Credit \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"I’m sure many real estate agents out there are throwing parties and dancing in the streets with the Senate passage of the so-called stimulus that includes a $15,000 tax credit for home buyers. The idea is that somehow this will magically rescue the housing market and (presumably) reverse the fall of home prices. 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