Current Housing Indicators |
| CURRENT | PREVIOUS | ||
| Existing Home Sales | 4.49m | ▼ | 4.74m |
| New Home Sales | 309,000 | ▼ | 344,000 |
| Housing Starts | 583,000 | ▲ | 477,000 |
| Building Permits | 547,000 | ▲ | 531,000 |
| HMI | 9 | UNCH | 9 |
| Existing Home Prices | $170,300 | ▼ (annually) | $199,800 |
| New Home Prices | $201,100 | ▼ (annually) | $232,400 |
More Videos
- Treasury On Mortgage Modifications
- Citi Mortgage Reveals What Treasury Won't
- Investors May Skew Housing Reality
- 100% Mortgage Financing From USDA
- Despite Government Aid, Foreclosure Crisis is Not Improving
- Housing Data Delivers Mixed Messages
- Appraisals Now Center Stage in Housing Recovery
- Underwater Mortgages Could Sink Even Deeper
- First Time Buyers Rescue Housing: Realtors
- Housing Recovery 'Still In Uncharted Territory': HUD Secretary
MOST SHARED
- Garlic Price Rises Surpass Gold, Stocks in China
- New-Home Sales Jump 6.2% To Highest Level in Over Year
- S&P Stocks Trading at New 52-Week Highs
- US Plans to Reduce Emissions By 17% Within Next Ten Years
- Judge Erases Couple's $525,000 Mortgage Payment
- The Executive Job Search
- Where Do Pardoned Turkeys Go?
- Salvation Army's Kettles Now Credit Card-Ready
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- AIG, Ex-CEO Greenberg Reach Pact to Settle Disputes
- Bank of America CEO Search May Extend Into 2010
- 'Cancer of Fraud' Permeates Health Care System: Critics
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Judge Erases Couple's $525,000 Mortgage Payment
- For Many in US, It Will Be a Scaled-Down Holiday Season
- Where Do Pardoned Turkeys Go?
- Jobless Claims Below 500,000, Durable Orders Slip
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
RSS FEED
Realty Check
Text Size 
A little bird told me that the home builders will be on Capitol Hill next week, pushing for a home buying stimulus. Now before everyone goes crying “Big Builder Bailout,” just listen to the proposal, which is only for owner occupants, and the thought process that goes behind it.
The builders are asking for a home buyer tax credit, not just for buyers of new construction, but all home buyers. The credit amount would be 10 percent of the home price, capped at 3.5 percent of FHA loan limits, so ranging between about $10,000 and $22,000. This is an out and out credit, unlike the $7500 tax credit offered last summer that has to be paid back over time; that one did nothing to stimulate home buying. The credit would be available at the time of closing.
In addition to the credit the proposal seeks a government-funded mortgage buy-down program, in which a 30-year fixed rate loan would be available at 2.99 percent for the first six months of 2009 and then at 3.99 percent for the rest of the year. The builders also add at the end: “continue foreclosure prevention measures to keep people in their homes…” You can find the whole shebang at www.fixhousingfirst.com.
So the premise behind this proposal is that rather than putting all your eggs in the foreclosure mitigation basket, which isn’t working all that well so far, the only way to save the housing market, which in turn will save the economy, is to stimulate home buying. Get all the pent-up demand off the fence with great deals on homes—an offer buyers just can’t refuse. By stimulating home buying, you knock down the excessive inventory, put a floor under home prices and restore home equity, which in turn could help somewhat (though not totally by any stretch) the foreclosure predicament.
Does it help the big builders in the end? Of course it does, but it’s not a direct bailout, a la autos, by any stretch. And, as one public builder suggested to me, the big builders only represent 20 percent of the home building business, and they are, so far at least, in large part weathering the storm (although they’re not exactly a buy…). It’s the little guys who are going out of business at an alarming rate.
Is this the right fix? Dunno. I’ve heard so many proposals at this point that I really don’t think any one of them is the golden ticket. But I do know that home purchasing creates jobs, and I’m not talking about builders and Realtors. Think about the last time you bought a home. How many people were involved in the chain? And once you moved in, how many retailers did you frequent in your quest to put your personal mark on the place? From curtains to carpet, restocking the fridge to hanging the family photos. And services: Movers, landscapers, painters, plumbers, electricians, trash haulers, storage facilities. I could go on.
Buying homes, new or old, creates and maintains jobs. Foreclosure “mitigation” is one part of the puzzle, but it’s not the whole picture. We who cover housing are hearing nothing but gloom and doom as we head into the new year. And despite what you all may think of the media, and its propensity to tout the dire and the despondent, here’s a newsflash: Hope is a good story too. Just ask our new President.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes