David Bruce

February 17th, 2009

Stimulus Falls Short For Real Estate

Late last week the House and the Senate agreed on a compromise $789 billion fiscal stimulus plan, which is expected to pass within days. The Obama administration estimates that the plan will create 3.5 million jobs. Both the House and the Senate had passed versions which were larger than the final compromise plan, and the reduction in scope helped mortgage markets. A smaller plan means that the government will have to issue less debt. Unfortunately, one of the spending cuts in the final plan was a provision for a $15,000 homebuyer tax credit, which came with an estimated price tag of $35 billion. This was a measure which experts say could have quickly energized the real estate markets. Instead, the government will leave in place an existing $7,500 tax credit, applicable to only first time homebuyers. The good news and primary change to the tax credit is that it will no longer need to be repaid. The estimated cost of this $7,500 tax break is less than $3 billion.

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This entry was posted on Tuesday, February 17th, 2009 at 6:00 pm and is filed under Mortgage Info, Real Estate News and Statistics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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