By the Numbers: Home-buying tax credit squeezed out of stimulus bill

Amount of the tax credit for home purchases that was expected to be part of the economic stimulus bill. The credit, seen as a way to invigorate the moribund U.S. housing market, was dropped from the $789 billion bill that the Senate passed. The current version of the bill has an $8,000 credit (up from $7,500) for first-time homebuyers.

Comments

[Tim Kassouf]

This is a travesty for the homebuilding industry, and indeed the rest of the economy. http://www.fixhousingfirst.com promotes the housing industry and makes the case for the larger economic interest in doing so, and I recommend taking a look.

A home is the average person's largest investment, and until people know that this investment is secure, consumer fear will remain high. Quite frankly, consumer fear's been the biggest driver of this recession.

[Mike]

The biggest difference between this and the plan for 2008 is that this is suppose to be a true tax credit where as the previous plan was a interest free loan paid back over 15 years.

[mrdintc]

I am extremely disappointed in the Democrats for nixing the $15,000 tax credit for purchasing a home in 2009.
I lost my job a while back and did everything I could to avoid foreclosure. We managed to sell it on a "short sale," but took a big hit on our credit. Now, my wife and I both have good steady incomes as a teacher and RN, but are trying to get back into our own home. While renting, the loss of deductions leaves me with a $3,000.00 tax bill.
We are able to buy a house on a land contract. We will have to get along without appliances for a while. We can do this, but imagine if we had an extra $12,000 (after taxes) to buy a stove, refrigerator,dishwasher, and microwave. If people are using it this way we would surely be putting a boost into our economy. And to think I came very close to voting Democrat for the first time.

[Thane Walkup]

I just bought my first piece of property this week, and will probably qualify for the whole credit. And you know what I say?

I wish they hadn't done it. Yes, I would give up an $8000 tax credit for real fiscal stimulus, because I know that me getting mine isn't going to be worth a hill of beans if the whole thing falls apart.

Face it, the real estate bubble was just that - another bubble in a long series of financial industry-driven bubbles going all the way back to the savings and loans scandal of the late 80s. People got suckered into turning their personal property into an investment instead of a place to live. Instead of trying to reinflate the bubble or saving the golden parachutes of bankers, it's time to try something different. If a bank fails, nationalize it, let the investors take a bath, turn it around, and resell it when it's profitable. Invest in real infrastructure (roads, bridges, manufacturing, power lines) and energy independence (insulation, real biofuel research instead of ethanol, tidal, etc.) so that we can actually grow our economy's real value.

[JPLand]

From what I understand, that provision was put in by Johnny Isakson (R) from Georgia and was approved by the senate 100-0. Then Isakson voted against the entire stimulus plan and as "luck" would have it, that item was cut out of the bill when the house and senate versions were being merged. Politics are a killer.

[cb]

I just applied for the 2008 credit. Only $3,750 for single home buyers. $7,500 for a couple.

[Rob]

Oh well. That about makes up my mind now not to buy a new house. My wife and I had just started thinking about buying new instead of renovating. When I saw the news about the $15K credit, I was leaning WAY OVER on the side of building new. (We would qualify to take the credit in the first year as it was designed).

Now, with only $8K, and the "new home buyer" requirement that has immediately killed the idea. We're staying exactly where we are until this depression blows over.

[creditlook]

nice to see that this topic is finally getting some airtime. Keeping hush-hush about it doesn't make it go away... BTW, here's some more info about Bad Credit Credit Cards for those interested.

[John]

We're in the same boat as Rob. A year ago we were looking to move, but the market was looking shaky so we decided to stay put. When it was announced as $15k for anyone buying a house we went back and started looking again. Now it's $8k and not for us. Guess we're staying put again.

I think what bugs me the most is that the Dems put the $15k in the bill as a way to reach out to Republicans like Isakson who then proceeded to beat the Dems over the head with the cost. Then those same Republicans who were crying about the cost are now crying that this was cut. Just more proof that you can't make Republicans happy.