According to the National Mortgage Complaint Center (NMCC), U.S. residential real estate values are going to decline much further if the homebuyer tax credit is not reinstated. Calling federal attempts to help homeowners in foreclosure through foreclosure alternatives and loan modifications “an utter failure,” NMCC spokespeople have announced that “restoring the federal tax credit for a home purchase would be a huge step in the right direction” toward stabilizing the U.S. residential real estate market[1]. The group also suggests that the amount should be increased to $15,000 and the all qualified homebuyers should be eligible, not just first-time homebuyers. In the same statement, NMCC took direct aim at the president, saying that “we appreciate the concept of free enterprise and/or risk and return is lost on President Obama, but someone in DC had better start thinking outside of the box now or it could be too late.” At the same time NMCC also brought up the continuing issues with Chinese drywall, saying that these homes are nearly guaranteed foreclosures because homeowners cannot sell them and are not able to remain in the homes due to health complications.
We agree with NMCC that the housing market is in trouble, but is a tax credit the right way fix things and if not, what do you think will work?
Thank you for reading the Bryan Ellis Real Estate Letter!
Your comments and questions are welcomed below.
[1] http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/09/01/prweb8750503.DTL#ixzz1XMqL57o9
It seems to me that it is probably too late in the game for a tax credit to help the residential real estate market out of the doldrums. The only thing that is really going to help is to create jobs and get the economy on solid footing. The official unemployment rate is said to be 9.1%. The true unemployment rate is closer to 16-17%. By some estimates, it may even be as high as 20%. With this level of unemployment and dismal economic growth, the housing market will not recover.
Not home buyer credit anymore.
The Government should stop foreclosures at once and force the banks to modify mortgages by lowering the principal to fair market value at 2% for up to 40 years.
If banks refuse, the Government should take these homes over from banks at the 10% below the market value as they do with an eminent domain and do it, starting with the longest delinquent loans.
This would immediately start the recovery of housing market.
@Barb, so what about all of us homeowners that are paying our mortgages as agreed and on time? Do we get that same 2% for 40 years? Ideas like that are part of the problem not the solution.
No more tax credits. This stupid idea was bound to fail and prolong the pain. Those who advocate for it need to take Econ 101.
@Barb, why should principal be paid if someone is underwater? Do the banks get to keep the profits or increase the principal balance of the loan when someone is above water? An underwater homeowner is a gambler that can’t immediately profit. The rest of us responsible citizens who abstained from this casino are playing the world’s finest violin in concert together. No instant housing ATM for the foolish. They need to learn from their mistakes, not have them subsidized.