Much discussion has taken place surrounding the $15,000 homebuyers’ tax credit since the measure passed the Senate late last week. The most important thing to know about the credit is that is doesn’t yet exist … the revised measure has not been passed by the House nor signed by President Obama.
Should it pass in current form, however, those buying homes within one year of the bill being signed into law will receive a tax credit equal to 10% of the purchase price of a home, up to $15,000, which can be spread across two years if needed. Which makes one statement I saw somewhat curious …
Sheila Crowley, president of the National Low Income Housing Coalition, questioned the decision to subsidize home purchases when housing prices still remain out of the reach for much of the working class.
“Why would we do something like this now?” Crowley said. “Really, only well-off people are in a position to buy a house.”
I’m not sure of what city Sheila Crowley works out of, but the idea that only “well-off” people can purchase is absolutely ludicrous given there are pockets of the Phoenix real estate market where a mortgage would be less than rent (and not just in the outskirts of town like Queen Creek and Buckeye.)
A couple of caveats apply … if you’re one of my many Canadian buyers, clearly this doesn’t do a think for you. And if you’re an investor or someone looking for a second home, you’re also out of luck – to qualify, the home needs to be your primary residence for at least a year.
There are and will continue to be many who decry the measure as another log on the fire of government deficit spending. I don’t necessarily disagree. Others will ask why only the folks who buy now will benefit. I might ask the same.
But the basic reality is the only way for the economy to recover is for the cycle of people not spending and then losing jobs because businesses can’t remain viable without some level of consumer spending to be broken. Anything that pumps money back into the economy through the front door (as opposed to the backdoor money used to prop up those businesses begging for a handout) can only help.
None of us are immune to what’s happening to our economy. At some point, less time needs to be spent looking backwards pointing fingers at those who caused the problem and more time devoted to finding a path back out of the morass.[tags]Phoenix real estate[/tags]