A plan to stimulate home buyers again
The National Association of Homebuilders wants to see Congress implement a program to help stimulate buyers and give them a reason to rejoin the market. Rico Gagliano reports the plan involves two parts: tax credits and low fixed rates.
More on Housing - Real Estate, America's Financial Crisis
TEXT OF STORY
Scott Jagow: You might remember the government launched a program this year for homeowners facing foreclosure. The plan was to help 400,000 people. But the Washington Post says so far, only 312 people have signed up. Apparently, the fees are high and so are the interest rates. The secretary of Housing and Urban Development tells the Post the program's a failure.
Homebuilders have another idea for the housing market. Rico Gagliano reports.
Rico Gagliano: The National Association of Homebuilders says its proposal is simple:
Jerry Howard: Basically, we're hoping to go back to the future.
That's Jerry Howard, the Association's CEO. He says he'd like to see a program like the one Congress implemented during the recession of '74.
Howard: And that is a two-part component to reduce the amount of existing inventory. It would not be a stimulus to any homebuilders, it's more of a stimulus to buyers.
Part one: A tax credit for new homebuyers -- up to $22,000 bucks depending on the region. Part two: For maybe a year, buyers would get a low fixed rate of, say, 3 percent on a 30-year loan. The government would eat the difference between that and market rates.
Jerry Nickelsburg of UCLA's Anderson Forecast says giving buyers a reason to buy isn't a bad idea.
Jerry Nickelsburg: There are qualified buyers who are sitting on the sidelines because they don't know when the bottom is going to be achieved. And you know, if they're incentivized to come back in that will start the ball rolling.
But Nickelsburg isn't sure this proposal will do the trick, or if the government has the appetite to help out another industry.
I'm Rico Gagliano for Marketplace.
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