September 30, 2008
What To Do When Incentives Don’t Work? (Lower Prices Perhaps?)
“The [homebuilder] industry will ask lawmakers to pass a $15,000 tax credit for all homebuyers, replacing a smaller incentive enacted earlier this year that they contend failed to stimulate demand.”
From the chief executive officer of the National Association of Home Builders:
“Our members are really hurting…The [$7,500] tax credit passed in July seems to have failed to have sparked interest. We are hearing from high volume and small volume builders that it has had no impact.”
And from the co-director of the Center for Economic and Policy Research in Washington:
“Let the house prices settle, then worry about stimulating the market…I have very little sympathy for these builders. If they weren't able to figure out what was going on during the bubble, don't go crying to the government.”
∙ `Hurting' Builders Seek New Tax Credit to Help Market [Bloomberg]
First Published: September 30, 2008 5:45 AM
Comments from "Plugged In" Readers
completely agree with that last quote..they do NOT need a break.
Posted by: DanRH at September 30, 2008 9:02 AM
It seems to me that home ownership is already more than sufficiently subsidized between tax deductions and implicit (now explicit) subsidies for things like Fannie and Freddie. And, of course, the bail-out. Probably the best thing would be for the home builders to just chill out for a couple of years until the homes they have already built are sold.
Posted by: NoeNeighbor at September 30, 2008 9:19 AM
Homebuilders should be worried about practical things like getting lending and appraisals under control. Once the market is in order, then things will sell. The current problems were in large part caused by what they have been getting away with for the last five to ten years, so asking for more favors is only going to dig their hole deeper.
Posted by: Mole Man at September 30, 2008 10:15 AM
I'm not sure where I saw this, but a similar $2,000 tax credit in the 1970's was widely considered to be effective in stimulating home buying. Looks like $2000 in 1970 has a current buying power of almost $12,000.
Posted by: Publius at September 30, 2008 11:44 AM
I suppose when the speculative nature of your business (home building) doesn't work out- you go cry to GWB/FEDS and he/they will take care of it...bc god forbid we should take responsibility...so un-american to be responsible for our actions
Posted by: cry me a river at October 1, 2008 6:04 AM