We are starting to see suggestions for another round of federal tax credits in order to try and jump start the housing market again. Is this really a good idea? Thanks to Bryan Murphy for the link to this article. While it would certainly provide some short term relief and as the article suggests, provide a reduction in the current inventory of homes, experience suggests that the last round of tax credits did not do much to solve the underlying problem. I would suggest that further tax credits are not the answer. The tax credits earlier in 2010 worked well to stimulate activity, but the market is paying the price with a slow down now. The housing market will recover on it's own, and the faster it corrects naturally, the better for everyone in the long term. Housing would benefit much more if the federal government would use their "laser beam" to focus on job creation . There are hoards of people out there who are on the fence about buying their first home, or upgrading their current home. I speak with them every weekend. They are not moving forward because of the wobbly economy, the reckless spending of the feds, or a general unease about our country. They fear for their own long term stability. What we need to stimulate the housing market is a boost in consumer confidence. Once people are confident, they will be out in force buying homes. Builders will start building new homes again, and the economy will start to take off.
With low home prices, and record low interest rates already present in the market, the only missing piece is some confidence in our economy. Please call or write your congressman and ask them to keep their eye on the ball. Elect representatives that will focus job creation and spending cuts.