$15,000 Home Buyer Tax Credit

by Osman Parvez
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Not only is the Senate GOP pushing for a 4% mortgage rate program in the latest stimulus bill, they're adding a tax credit of up to $15,000 for home buyers. Will it pass?

From the NYT:
But Senator Johnny Isakson, Republican of Georgia, a former real estate broker, who was the prime sponsor of the home buyer credit, said it was modeled after a similar, $2,000 home buyer incentive that helped lead the country out of recession in 1975.

“We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what’s happening now,” Mr. Isakson said at a news conference.
“Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that’s what I was doing to feed my family and make a living.”
The tax credit would give buyers 10 percent of the price of a primary residence bought within one year, up to $15,000, and is intended to stabilize plummeting home prices, which caused a wave of foreclosures and led to the near collapse of the financial system as Wall Street firms wrote down billions in mortgage-backed assets.


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