The $15,000 home-buyer tax credit in the stimulus bill is a HORRIBLE idea

[Robash]

Actually it puts YOU in debt for that $7.5k - it's repayable over 15 years right now. The new thing is a tax credit, not a loan.

 

im not really in debt i just get 500 less per refund during the next 15 years...but is the 15k for people who have bought a house or going to buy a house?

[General Itals]

im not really in debt i just get 500 less per refund during the next 15 years

 

Well, of course you are in debt for the next 15 years. But I would rather keep $7500 of the gubments money interest free for that period of time than some credit card companys at 10%.

 

but is the 15k for people who have bought a house or going to buy a house?

 

If this passes as a part of the stimulus act, which I believe it will, it will be for people who purchase houses after it is enacted. So basically, we got hosed for being patriots and stimulating the economy last year.

 

Also, it won't impact how people qualify for a house. This is money they will receive after the closing when filing their tax return. Like you and me, they will probably go and spend it at Home Depot and Lowes, both of which have been graveyards the last few time I've been there.

Edited February 8, 2009 by General Itals

[wiegie]

Soooooo, what you're saying is that people who already own an overvalued house, which they're probably upside down on, are going to go out and try to sell it, so they can buy somebody elses overvalued house so that they can pocket 15K? Seriously?

uh, no, that's not what I'm saying and I don't know where you got that interpretation from

 

I am saying that the tax credit is not going to be stimulative nor will it fix the housing crisis.

 

This isn't even close to the truth. The majority of home sales today, and in the foreseeable future, unlike 3-5 years ago, are going to be FHA sponsored loans. 3.5% down. 580-600 credit score minimum.

So, you are saying that poor people are going to be more likely to buy a home in the next few years than wealthier people? maybe, but it sure as hell isn't obvious to me that this is going to be the case

[General Itals]

uh, no, that's not what I'm saying and I don't know where you got that interpretation from

 

I am saying that the tax credit is not going to be stimulative nor will it fix the housing crisis.

 

Whether a house has already been built or not is irrelevant to a stimulus debate. The fact of the matter is that there is a glut of foreclosed and unoccupied new houses in this country. In order to get builders working again, this inventory needs to be depleted. This amendment aims to help that happen, providing people (primarily renters) 15000 reasons to buy.

Edited February 8, 2009 by General Itals

[wiegie]

Whether a house has already been built or not is irrelevant to a stimulus debate.

This is just dead wrong.

 

]The fact of the matter is that there is a glut of foreclosed and unoccupied new houses in this country. In order to get builders working again, this inventory needs to be depleted. This amendment aims to help that happen, providing people (primarily renters) 15000 reasons to buy.

So, the way to fix the problem of too much housing is to set up some sort of provision that creates even more housing?!? The simple fact is that housing prices are still out of line with where they need to be and just prolonging a bubble makes no sense.

 

Even if you really do want builders to get to work building homes (instead of hospitals, schools, etc.) then you should still set up a provision in the credit that says you only get the credit if: 1) you are a first-time homebuyer (defined as people who haven't owned a home for a certain period of time) or (2) you are buying a newly constructed house.

Edited February 8, 2009 by wiegie

[Azazello1313]

This is the economic equivalent of paying people to dig holes in the ground and then paying them again to fill the holes up.

 

that pretty much sums up the whole $trillion stimulus bill, not just this "little" $40B part of it.

[Ursa Majoris]

Even if you really do want builders to get to work building homes (instead of hospitals, schools, etc.)

FWIW, residential and commercial construction are usually carried out by different companies. Hospitals and schools etc are occasionally stymied by the inability of the owners to obtain finance right now.

[Azazello1313]

to save me the trouble of digging around, can someone link me to some article explaining this amendment, what people say are the pros and cons, etc? the way wedgie explains it, it sounds ridiculously stupid for the reasons he mentions. it probably is. I'd just like to hear from someone who knows what they're talking about who supports it.

[bushwacked]

that pretty much sums up the whole $trillion stimulus bill, not just this "little" $40B part of it.

 

 

Yea, I can't immediately relate to Wiegie's concern about this particular portion of the package. Beyond the fact we are apparently in trouble, and we seem to be funding a bunch of services on US soil at 1.25 times the cost of the Iraqi occupation; I don't have the knowledge to justify the situation from any perspective.

[Jimmy Neutron]

This is just dead wrong.

 

So, the way to fix the problem of too much housing is to set up some sort of provision that creates even more housing?!? The simple fact is that housing prices are still out of line with where they need to be and just prolonging a bubble makes no sense.

 

I think Wiegie is right about this. Home values have not hit bottom. I also don't think it's wise to incentivize first time home buying right now because I would think those perspective buyers are bigger credit risks.

[H8tank]

HopenChange muthaf0kr!!!!

 

EAT IT!

[Caveman_Nick]

If this passes as a part of the stimulus act, which I believe it will, it will be for people who purchase houses after it is enacted. So basically, we got hosed for being patriots and stimulating the economy last year.

 

I don't see how those people are somehow getting less screwed that the large percentage of Americans that paid their bills well, but are getting dragged kicking and screaming into this whole stimulus bill.

 

The whole thing needs to go away.

[wiegie]

I'd just like to hear from someone who knows what they're talking about who supports it.

me too--my guess is, however, that no such people exist

[wiegie]

FWIW, residential and commercial construction are usually carried out by different companies.

I'm not so much worried about the companies themselves as I am the overall industry. My guess would be that it would not be overly difficult for construction workers to shift between residential and commercial construction. (I might be wrong about this though.)

[Ursa Majoris]

I'm not so much worried about the companies themselves as I am the overall industry. My guess would be that it would not be overly difficult for construction workers to shift between residential and commercial construction. (I might be wrong about this though.)

A lot of the work is similar though there are quite a few different skill sets involved as well as the obvious difference in scale. Traditional residential doesn't need that many crafts, commercial does.