The U.S. Senate has approved an amendment to the economic stimulus package that would provide a tax credit of up to $15,000 for homebuyers who purchase a primary residence in the upcoming year.
Senate added to the $900 billion stimulus bill on Wednesday a home purchase tax credit of $15,000, or 10% of the purchase price. Also on tap is a proposal being pushed by Senate Republicans for a federalized 4% interest rate on 30-year fixed mortgages. They believe this will spur home sales and help homebuyers, homesellers, builders and all alike.
A Hike in FHA and VA Loan Limits?
The stimulus bill that passed included provisions to increase limits on loans eligible for financing from government-backed mortgage entities as high as $729,750 in the nation's most expensive housing markets.
Will it Work?
Some economist argue that throwing the "kitchen sink" in incentives to buyers will encourage builders to start doing what they love to do, build. Therefore increasing our already oversupply of inventory on the market.
What I believe
I believe that believing in our government and having a bit of consumer trust will spur home sales. It's like having an addict as a friend or family member. You want to invite them back into your life, but they not only need to talk the talk they have to walk the walk. Even though the country seemed to have had confidence that change was coming, it did not take away the continued job loss, home sales decline and lack of a plan to help the masses. This administration is doing a lot to help our economy, but it takes a lot to help our ecomony. Home prices are still TOO high in most housing markets for those who have experienced job loss, pay decreases and higher living expenses to afford a home and all that comes with maintaining it. Many foreclosures enter the market at fair market value within 90-120 day marketing modules instead of "quick sale pricing". Why? Why not? If there is an offer generated within 1-90 days to help the investor recapture some of the possible loss of the foreclosure, why not take that risk. Especially if the property is located in a stable to mildly depreciating market area. We need to push short sales more on Capitol Hill. It creates a better market for homes to be priced as they should, helps the buyer afford what he or she can, and allows the homeowner to have piece of mind for an upside down mortgage if they can not qualify for a loan modification.
http://www.charlotterealestateforeclosures.com/004B6F
