I learned the basic process of how a bill becomes law from the Saturday morning cartoons back in the 70's. This mornings news that a tentative agreement had taken place regarding the tax credit for home buying being extended and widened was comforting, but as I've been telling people for months, its just a bill. They have ways of going "incognito" that weren't ever discussed on the cartoons. Getting stuck in committees, fillibuster, and on and on.
My sincere hope is that the housing market has gotten enough of a shot in the arm from the low interest rates and prior tax credits so we don't need more artificial market stimulus to "entice" people into buying homes.
I purchased my first home not too long ago, but interest rates were 7.25% and there wasn't an incentive. I ended up making a decent amount of money on that house. If buyer's are conditioned into thinking that the only reason to buy is the federal stimulus, I'm wondering what will happen when it all goes away.
Assuming the 'power's that be' deem this federal incentive to continue, it will be nice to have a continued push into home buying. One thing that I can say about getting more people to buy homes is that it appears to put more money into the economy than giving other types of incentives. When someone buys a home, what else do they buy? A mortgage, insurance, 10,000 trips to their local hardware & home supply store or garden shop. Does the same money go out when "Cash for Clunker's" took place? Maybe some fuzzy dice and a license plate holder (in my neighborhood, a few thousand on rims and some subwoolfers too).
Expanding the credit to non-first time buyer's is nice too. Giving families an incentive to upgrade seems as worthwhile as giving first time home buyer's the incentive.
More information to come at www.4SaleStLouis.com.
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