While visiting a friend's home recently, I noticed a saying that had been stenciled on the wall in big letters: "A House is Built with Boards and Beams, A Home is Built with Love and Dreams."
I love the idea that a house - the actual edifice - can become more when filled with people. But the proverb also indicates a need for a place - a physical structure - in which we cultivate relationships and live our lives.
For too many Utahns, the dream of owning a home has grown out of reach over the past several years. Even those not in the market for a new home feel the economic crunch. The construction industry alone lost 11,000 jobs in the past year.
These are challenging economic times, but we control our own destiny. Getting the housing market back on track will go a long way toward solving our economic plight. For several reasons, now is an excellent time to buy.
Last week, President Bush signed the Housing and Economic Recovery Act of 2008. This new law has the potential to benefit a large portion of our economy by providing more opportunities for individuals and families looking to improve their housing situation.
The benefit of the law depends greatly on how we utilize it.
The new legislation provides a $7,500 tax credit to first-time home buyers, defined as those who have not owned a home in the past three years. Retroactive to April 8,2008, this credit provides the extra incentive for those who have been saving for a new home but felt, for whatever reason, they would not be able to afford one.
The tax credit can be used for any number of expenses related to the purchase of a home. It can supplement a down payment or take care of closing costs if necessary. It can also be used for home furnishings, electronics, landscaping, decorating, moving expenses or purchasing everyday household items like dishes, utensils and glassware. All these items are part of the finishing touches that help make a house a home.
We've all heard of "trickle-down" economics, but this is essentially "trickle-up" economics. As first-time home buyers enter the market, armed with an extra $7,500, they increase the demand for homes and in the process help stabilize the market value of homes.
As they purchase their first home, they free those who are selling their first homes to move up in the market to more expensive homes. Those who had $200,000 homes now buy houses in the $300,000 range. That allows more homeowners to sell and move up in the market as well as allowing empty nesters and recent retirees an opportunity to downsize.
Mortgage brokers, realtors and homebuilders receive critical new clients and the benefits don't stop there. Sales of furniture, electronics, household items, landscaping supplies and home improvement items also increase. An escalation in sales also boosts manufacturing and shipping.
The process profits the broader community because all these transactions infuse tax revenue into the system, benefiting the community in a variety of ways.
All this comes at essentially no burden to the taxpayer in the long run. The tax credit is paid out in one chunk of $7,500 but paid back in increments of $500 over 15 years. Homebuyers get money they need now - interest free - while everyone else benefits from the boost that comes to the economy.
Transactions make the economy move. Shortsighted policies like NINJA loans (loans to people with no income, no jobs or assets), subprime and jumbo loans of the past several years caused the problems of today. Smart transactions benefit us now and in the long run.
As the president of Utah's largest business community, I applaud Congress for doing its part to reignite the economy. Now it is up to the American consumer to realize this is a great time to buy a home. With interest rates between 6 and 7 percent, tax rebates and credits from the federal government and a buyers market, it's a great time to make the American Dream a reality.
*LANE BEATTIE is president and CEO of the Salt Lake Chamber-Posted from Salt Lake Tribune by Lane Beattie.